Ethereum Foundation (EF) contributor Josh Stark posted on social media on August 27 a breakdown of the organization’s spending over the past two years.
Stark shared the information after rumors swirled that the foundation might be considering selling a large amount of Ethereum. The rumors arose after a wallet linked to the foundation made a large transfer.
Stark also hinted that the foundation intends to release a report on spending before this year’s Devcon, scheduled for November 12.
Funding distribution
Stark shared two pie charts showing the foundation’s funding allocation for 2022 and 2023. The charts contain seven main areas: new institutions, L2 R&D, applied ZK, community development, development platform, internal operations, and L1 R&D.
During these two years, research and development (R&D) for Layer 1 improvements and new institutions received the most funding. Stark explained:
“These charts reflect both internal and external spending. For example, ‘R&D L1’ includes grants to external client teams, as well as EF’s internal researchers. Over the two years, internal spending accounted for about 38% and external spending accounted for about 62%.”
Internal expenses are related to teams working under EF in different areas, such as Geth Client, Solidity, Devcon, and Ethereum Organization teams.
External spending is related to grants awarded by the foundation’s Ecosystem Support Program (ESP). Between 2022 and 2023, the ESP awarded $91.1 million in grants to 895 different projects, according to data collected on its website.
Stark noted that ESP publishes quarterly reports on grants awarded to new projects, with the latest edition detailing grants awarded in the first quarter of 2024.
Addressing the “new institutions” category, Stark noted that this is one of the foundation’s efforts to “help create new organizations that can strengthen and support the Ethereum ecosystem in the long term.”
Stark mentioned entities such as open-source software provider Nomic Foundation, the Center for Decentralization Research, data aggregator L2Beat, and “other Ethereum-related and adjacent bodies” as examples.
Ethereum co-founder Vitalik Buterin echoed Stark’s message and reiterated the importance of investing in new institutions. He added that “no insect protein research from the World Economic Forum” exists within the foundation’s funding allocation.
$94 Million Deal Sparks Debate
Stark shared the funding breakdown after a large transfer of 35,000 ETH from EF’s wallet to cryptocurrency exchange Kraken on August 23 resulted in the death of a man. The large amount — equivalent to $94 million at current prices — sparked debate within the crypto community over how the funds would be allocated.
Given the large size of the transaction, investors were worried about a possible drop that could add further pressure on its price as ETH has dropped 22% in the last 30 days.
The angel investor known as DCInvestor suggested Buterin said the next big trades should be broken into 12 smaller moves, which would help ease fears of a market meltdown.
Buterin answered This proposal faces the logistical challenge of coordinating multiple transfers from a multi-signature wallet that requires four confirmations. Multiple transactions would mean the transfer would have to be signed 48 separate times. He added:
“There are of course solutions (e.g. multiple wallet tiers), but for obvious reasons we don’t want to rush into something so security sensitive.”
