Ethereum News: Trent Van Epps, former head of ecosystem development at the Ethereum Foundation and co-organizer of Protocol Guild, warned in a June 26 CoinDesk Markets Outlook interview with Jennifer Sanasie that development of Ethereum’s core protocol requires around $30 million per year to stay healthy, a figure that existing funding mechanisms fall far short of covering, with no replacement infrastructure yet in place to bridge the gap.
It’s not just a budget deficit. This is a structural test of whether the deliberate decentralization of Ethereum’s governance authority can outpace the deterioration of the funding pipelines that this authority was intended to replace.
Subtraction Strategy: Intentional EF Removal and What It Leaves Behind
Van Epps left the Ethereum Foundation after its leaders committed to accelerating the subtraction strategy, a philosophy aimed at deliberately reducing the central role of the FE and building legitimacy in the broader ecosystem.
Is Ethereum Facing a Funding Crisis? @trent_vanepps joins @jennsanasie on Markets Outlook to analyze ETH’s $30 million funding gap and what’s next.
00:00 – Trent Van Epps joins the markets outlook
00:57 – Why Trent left the Ethereum Foundation
01:55 – What is subtraction and why… pic.twitter.com/bgv7hYnzmo– CoinDesk (@CoinDesk) June 25, 2026
Operationally, this means reducing annual treasury disbursements by around 15% of holdings per year to a baseline of 5% by 2030. The EF has also reduced its headcount by around 20% and seen ten senior officials leave in around six months, including its second co-director in four months, a pace of organizational change that has amplified ETH governance issues across the ecosystem, as detailed in coverage of the parallel restructuring and the change in FE cash management.
The most immediate pressure point is the April 2026 expiration of the Customer Incentive Program (CIP), a four-year FE-funded program that offered vesting-related ETH rewards to execution and consensus customer teams, including Geth, Erigon, and Lighthouse maintainers, based on mainnet reliability. The CIP was designed from the outset as temporary support while sustainable alternatives developed. These alternatives have not materialized on a sufficient scale.
Protocol Guild’s assessment of the structural deficit
Van Epps co-founded Protocol Guild as a crowdfunding mechanism that routes donated tokens to active Ethereum L1 contributors through long-term vesting, without granting donors control over the protocol’s priorities.
Major contributors include Lido, Uniswap and ENS. Since its launch, Protocol Guild has distributed nearly $40 million to core Ethereum developers over about four years, averaging about $10 million per year, compared to a stated need of $30 million per year, leaving a structural deficit that Van Epps estimates to be about $20 million per year.
“The level of funding needed for core development is relatively stable. I estimate it’s around $30 million per year… We’ve distributed over $40 million to a lot of these core developers, but that’s going on for 4 years and ultimately it’s not enough,” Van Epps said in the CoinDesk interview.
He described the main obstacle as a free-rider problem: DeFi protocols, stablecoin issuers, and Layer 2 networks extract significant economic value from Ethereum’s shared infrastructure without facing any mechanism that mandates contributing to its maintenance.
Today, the FE is changing shape, concluding a months-long reorganization process as part of the implementation of the treasury management mandate and policy.
We emerge from this process with the structure, activities and people necessary to execute on critical points…
– Ethereum Foundation (@ethereumfndn) June 23, 2026
The analytical question is no longer whether the FE subtraction philosophy is directionally correct; it’s a question of whether the 3-9 month window Van Epps identifies will produce sustainable institutions or a slow cycle of developer attrition.
The risks he highlights are concrete: loss of key maintainers, reduced client diversity, slower response to bugs, and delays in roadmap work, including quantum resistance upgrades, a technical scope that highlights the complexity of maintaining core development across more than ten clients and research teams, as evidenced by the scale of Ethereum’s ongoing technical development commitments.
Ethereum News: Van Epps’ Case for a Multipolar Funding Future
Despite the warnings, Van Epps called Ethereum’s competitive position sustainable. He argued that Ethereum’s advances in decentralized finance, stablecoin settlement volume, and EVM adoption represent network effects that remain difficult for competitors to replicate, and that the $30 million annual figure is insignificant compared to Ethereum’s market cap of around $200 billion and trillions of dollars in annual stablecoin settlement.
Van Epps envisions a governance structure over the next decade in which the FE would operate in a smaller research and coordination role alongside several independent institutions managing commercialization, infrastructure financing, and ecosystem growth, a vision that Vitalik Buterin also articulated, describing the FE as “not designed to be an eternal manager.”
He also called for a clearer narrative connecting ETH as an asset to the network’s expanding on-chain economy, arguing that stronger advocacy around ETH’s value accumulation is a prerequisite for attracting the institutional patronage that would replace CIP-style support.
We believe the next visible indicator of the success of this transition will not be a governance announcement but a list of client teams, in particular, whether the developers who built and maintained Ethereum’s runtime layer will still be doing so in twelve months.
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