Should the Ethereum Foundation be dissolved?
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Should the Ethereum Foundation be dissolved?
The only way forward may be for the Ethereum Foundation to dissolve in the coming years.
Navigating Web3 tides with focused insightsAuthor: Brunny.eth
Translation: Alex Liu, Foresight News
This week, two Ethereum Foundation researchers (Justin Drake and Dankrad Feist) disclosed that they have become advisors to the EigenLayer Foundation.
This action undermines the Ethereum Foundation's credible neutrality. I will argue below that a commitment from the Ethereum Foundation (EF) to dissolve itself within the next few years may be the only viable path forward.
Background
The Ethereum Foundation has a set of clear principles:
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"We try to reduce our power and resist the natural tendency of organizations to grow and accumulate power."
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"Whenever possible, we remove ourselves from the equation so Ethereum can thrive supported by a broad community, not just EF."
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"We do not attempt to control or force the ecosystem’s natural evolution, but we strive to help the community uphold its values and in this way help Ethereum keep its soul."
If your immediate reaction upon seeing this blog post's title is "Dissolving the Ethereum Foundation is an absurd idea," I have a few questions:
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Does the current Ethereum Foundation adhere to these stated principles?
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Is the current Ethereum Foundation truly credibly neutral?
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Can we reduce reliance on and influence from the Ethereum Foundation—this year, next year, or even over the next decade?
If the answer is no, why not?
If we want Ethereum to become the world computer, or the global settlement layer, or any version of your favorite 100-year vision for Ethereum, we must begin relinquishing the power and influence that EF holds within the ecosystem and allow the ecosystem itself to drive Ethereum’s development over the next century.
Intellectual honesty is one of my core values.
Credible neutrality is a core value of Ethereum.
In this case, both values have been compromised.
Let me quote excerpts from the disclosures made by these two researchers (emphasis added):
"The advisory role comes with substantial EIGEN token incentives, which could easily exceed the total value of all my other assets (primarily ETH). We are talking about millions of dollars worth of tokens vesting over three years. I commit to reinvesting all advisory income into valuable projects within the Ethereum ecosystem." — Justin Drake
"I did receive a significant amount of tokens from this position. I don't believe they will change or influence my stance on how the core protocol should be developed, but I think the community should know so they can hold me accountable. I believe EigenLayer, if run by people of high integrity, will bring significant benefits to Ethereum. I believe the current leaders intend to do so, and I plan to hold them accountable." — Dankrad Feist
In both disclosures, the researchers describe receiving substantial financial incentives. I respect their transparency in disclosing these incentives, though I wonder whether they would have done so without Cobie’s initial tweet and sustained pushback from the “social layer.”
Yet in both cases, these researchers—who clearly understand game theory and economic incentives well based on their work—claim they are immune to being influenced by these powerful incentives.
Economic incentives are almost certainly the most powerful force driving this industry—and nearly all human behavior.
How absurd is the idea that these two specific individuals are somehow immune to such extremely strong incentives?
I do believe, deep down, that Justin and Dankrad think of themselves as stronger than economic incentives. I don’t know them personally, but by all accounts they seem like excellent people. I’m not suggesting I doubt they are greedy or malicious individuals. Perhaps they are the strongest, most disciplined people in the world.
But what I fail to understand is how they can believe that Ethereum’s own credible neutrality remains intact given these advisory roles.
I am sympathetic to the idea of advisory shares—if they were disclosed immediately (rather than after public backlash), with clear statements of intent, and with proceeds partially allocated to organizations strengthening Ethereum… However, that’s not how this unfolded. Instead, this episode reveals a notable erosion of the ecosystem’s core values.
Credible Neutrality
This brings me to the Ethereum Foundation and the concept of credible neutrality.
Vitalik previously highlighted credible neutrality as a guiding principle (emphasis added):
When building mechanisms that determine high-stakes outcomes, the credible neutrality of those mechanisms is crucial.
Essentially, a mechanism is credibly neutral when, just by observing its design, it is easy to see that the mechanism does not discriminate against any particular person...
That is, a mechanism should not only avoid being designed to favor specific individuals or outcomes; equally important is that the mechanism must convince a large and diverse group of people that it is at least fundamentally striving for fairness.
This is where these two EF researchers fall short. Despite their intentions, it is evident that their ties to EigenLayer have compromised their ability—and more importantly, the Ethereum Foundation’s ability—to maintain credible neutrality.
Examples indicating the breakdown of credible neutrality include:
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March 2023 (according to Justin’s own timeline, EigenLayer began approaching Justin about an advisory role)—Justin implicitly proposed EigenLayer as a potential solution for based rollups.
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July 2023—the Bankless “Restaking Alignment” podcast, featuring both Dankrad and Justin, “debating restaking.”
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December 2023—Justin Drake’s talk at the Restaking Summit (sponsored by EigenLayer! Published on YouTube by EigenLayer!) promised to “detail certain incentive distortions introduced by restaking.”
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April 2024—Sequencing and Preconfirmation Calls, funded by EF (represented by Justin), supporting various groups researching L2 preconfirmations… with restaking included as a soft requirement.
They are not low-level EF employees. For better or worse, they are individuals who speak publicly on behalf of EF and significantly influence protocol decisions. Don’t just take my word—see how the lead of the Geth team (the most widely used Ethereum client) assesses their influence.
Nor can we ignore EigenLayer’s significance throughout this episode. EigenLayer is not merely another application on Ethereum—it has the potential to profoundly impact everything from protocol economics to the integrity of PoS consensus itself (as Justin described in the “Restaking Alignment” podcast above, apparently before he received his EigenLayer advisory shares).
Call to Action
I love Ethereum. Ethereum is the only reason I remain in this industry. I wrote this piece hoping to play a small part in shaping the infrastructure for human progress over the next century.
The EF has done incredible work—from funding PSE to Devcon to Summer of Protocols and countless other initiatives. Some of my favorite people in crypto work at EF, and it's hard to give sufficient praise for EF’s achievements over the past decade. I am deeply grateful to everyone who has worked on Ethereum over the past ten years to make it great—especially Dankrad and Justin, who played meaningful roles in making Ethereum what it is today.
But now is the time to follow EF’s long-term thinking, minimalist approach, and values-driven governing philosophy.
Let me state my call to action clearly and specifically. In my view, a positive outcome would be:
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The Ethereum Foundation commits to a multi-year timeline to freeze the protocol and dissolve the foundation, or
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If EF continues to exist, it adopts a constitution establishing binding principles the organization must follow, prohibiting key decision-makers from holding large advisory stakes—equivalent to Supreme Court justices holding major equity in companies they rule on.
I don’t have answers to the 100 open questions—how EF should handle its funds (burn them?), how All Core Devs will function (Protocol Guild?), or the exact mechanisms for dissolving EF. I hope this marks the beginning of a five- or ten-year discussion, not a demand for immediate dissolution.
But to me, it is clear that the only way to truly “help Ethereum keep its soul” and “resist the natural tendency of organizations to grow and accumulate power” is to dissolve the Ethereum Foundation and allow credible neutrality to flourish once again.
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