Marc Zellerfounder of the Aave Chan Initiative (ACI), called for the dissolution of the Ethereum Foundation. This follows a recent transaction suggesting that the Foundation was once again looking to sell the ETH top.
Ethereum Foundation set to disband after Verge purge and upgrades
In an X (formerly Twitter) jobZeller noted that the Ethereum Foundation should be dismantled and dissolved once the Purge and Verge Upgrades are delivered. The crypto founder suggested that the Foundation’s budget is too exorbitant, as he questioned why the foundation needs an annual budget of $100 million. He added that the Geth team receives “meager” compensation despite the “essential work” they do in the Ethereum Ecosystem.
Zeller’s comments were a direct response to a X post by the Executive Director of the Ethereum Foundation, Aya Miyagotchiin which she revealed that the Foundation’s recent deposit of 35,000 ETH ($94.07 million) into Kraken was part of its treasury management activities. She said the Ethereum Foundation has an annual budget of $100 million and most of that money goes to grants and salaries.
She suggested that the Ethereum Foundation has always had to sell a significant amount of its Ethereum holdings because some of the grant and salary recipients can only accept fiat currencies. Meanwhile, she also revealed why they are only conducting such treasury activity, noting that they have not been able to do so before due to regulatory complications.
The regulatory complication she was referring to is the United States Securities and Exchange Commission (SEC) an investigation into whether ETH was a security, although that investigation was ultimately closed.
As expected, the Ethereum Foundation’s deposit of $94 million worth of ETH into Kraken has sparked fears of a massive selloff, which could have a significant impact ETH Price. However, Miyagotchi assured the community that they are not looking to sell all of these tokens at once. She said, “There will be planned and phased sales from here on out.”
The Foundation’s budget is not sustainable
Ignas, cryptography researcher note that the Ethereum Foundation will spend all of its ETH holdings within eight years if it continues to operate with an annual budget of $100 million. Data of the Arkham Intelligence blockchain analytics platform shows that the Foundation holds 273,776 ETH ($748.88 million). Ignas added that if the Foundation wants to fund its operations for much longer, it will need the price of ETH to increase or start to staking your ETH tokens to earn returns.
The crypto researcher also revealed that most of the Ethereum Foundation Expenses are on grants. According to their 2021 financial report, which appears to be their most recent report, only 10% of the Foundation’s expenses went to salaries and maintenance of the Foundation. With this in mind, Zeller called for the Ethereum Foundation to remove “all” subsidies from its budget.
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