Ethereum is facing one of its most uncomfortable periods in recent memory, with GSR Research’s Carlos Guzman saying the change in leadership, ETH’s weak performance, and a sharp debate over the role of the Ethereum Foundation (EF) have exposed a deeper strategic crisis for the network.
GSR Research Reports Ethereum Identity Crisis
In a note titled “Ethereum Identity Crisis,” Guzman framed the problem as more than a temporary morale problem. At least nine senior FE contributors left in 2026, according to the memo, including five in May alone. The list includes protocol cluster managers Tim Beiko and Barnabé Monnot, senior researchers Carl Beekhuizen and Julian Ma, as well as former co-executive director Tomasz Stańczak.
Several of the releases followed an internal mandate focused on CROPS, shorthand for censorship resistance, open source, privacy and security. The framework was intended to clarify the foundation’s priorities, but Guzman wrote that many in the community perceived it as prioritizing growth and adoption at a time when Ethereum is already under pressure from faster rivals.
The staff turnover has amplified a broader debate over whether the FE should remain a narrow research and protocol institution or take a more active role in defending Ethereum’s market position. Dankrad Feist, a former member of the foundation, has publicly called for the creation of a new billion-dollar-plus organization economically aligned with Ethereum to fill what he sees as an institutional void. Bankless co-host and longtime ETH bull David Hoffman also said he sold all of his ETH, citing frustration with leadership he sees as insufficiently focused on growth.
The market context has made the internal debate more difficult to ignore. Guzman noted that ETH is down about 30% year to date, while the ETH/BTC ratio fell to 0.027 in May, its lowest level since mid-2025. Network revenue has also declined as Ethereum cedes ground to chains such as Solana, Tron, and Hyperliquid. Revenue is not a complete measure of network health, especially as blockchains deliberately lower fees to attract users, but this trend has fueled the perception that Ethereum’s economic gravity is weakening.
Vitalik Buterin responded with a lengthy article on X that sought to redefine the foundation’s role rather than expand it. Buterin described EF as “a smaller ship” that is expected to sell less ETH and focus closely on CROPS. He also argued that the foundation should be seen as “a single node, with a defined purpose,” and not the center of Ethereum itself.
This framework is at the heart of the tension identified by Guzman. Buterin’s argument is that it may be necessary to move talented people to positions outside the foundation if the ecosystem is to attract outside capital and develop independent leadership. From this point of view, the foundation should not become the growth department of ETH. It must preserve the properties that make Ethereum credible in the first place.
Buterin’s technical vision rests on three pillars that he believes could make Ethereum “deeply impressive” in ways that competitors cannot easily replicate. The first is software proven bug-free through AI-assisted formal verification, an approach that seemed unrealistic until recently but may now be moving closer to feasibility.
The second is what he called “available chain consensus,” a property that Guzman described as unique among proof-of-stake chains because it combines traditional BFT-style security under network asynchrony with Bitcoin-style security under synchronization against attackers by up to 49%. The third is the minimization of intermediaries, reducing Ethereum’s reliance on centralized relays and third-party infrastructure for transaction inclusion and privacy through proposals such as FOCIL and EIP-8141.
The main bet is credible neutrality. Guzman argued that this remains a more compelling advantage than Ethereum critics often acknowledge. The idea that “block space is a commodity” misses an important point: users have repeatedly shown a willingness to pay more to transact on one chain over another when that chain offers superior assets, applications, liquidity, and network effects.
But the note also highlights the limits of this argument. Credible neutrality may attract builders and institutions, but users still need affordable transactions, fast execution, privacy, and a convenient experience. On several of these fronts, Ethereum remains vulnerable to competitors who are optimizing throughput, fees and user experience today while promising stronger neutrality tomorrow.
Guzman’s conclusion is not that Buterin’s vision is wrong. The fact is that Ethereum’s execution window is not unlimited. The question now is whether a smaller, more narrowly focused FE can preserve Ethereum’s deepest differentiator while the rest of the ecosystem builds the growth machinery around it.
At press time, ETH was trading at $2,097.
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