The Ethereum Foundation, the nonprofit organization behind the second-largest blockchain, has recently come under intense scrutiny, with community members questioning why it would sell its Ethereum (ETH) holdings rather than stake them. .
Now, Blockchain co-founder Vitalik Buterin has responded and provided detailed insight into why the organization chose to sell.
Ethereum development efforts
It all started with an Oct. 25 social media post in which Buterin shared a roadmap for universal light client validation on Ethereum. One user called on programmers to stop dumping, noting that Buterin recently reported selling a small portion of his Ethereum holdings.
The 30-year-old quickly responded, telling users that he hadn’t sold a single ETH token in the last month and that his holdings had actually increased during that time. This prompted a question from another community member who wanted to know about the Ethereum Foundation’s position on the same.
Buterin cited several reasons for organizations to regularly liquidate their ETH stashes, including paying the researchers and developers responsible for advances such as EIP-1559. This proposal reduced transaction times and network costs.
He added that funds generated from the token sale were also earmarked for supporting zero-knowledge technology for privacy, account abstraction for user security, and several events to promote Ethereum globally. Ta. He said these efforts have contributed to the security and stability of the blockchain, with no downtime recorded since 2016.
Maintaining neutrality regarding market impacts
According to blockchain analysis platform Scopescan, the foundation sold 4,066 ETH, with a market value of just over $11 million. Scopescan calculated that at the current staking return rate of 3.1%, the institution could earn as much as $20.08 million annually by staking its 271,000 ETH holdings.
However, Buterin explained that one of the main reasons the organization does not stake ETH is to avoid an “official selection” in the event of a controversial hard fork.
“We don’t want to end up in a situation where we have to make a ‘formal choice’ in the event of a contentious hard fork.”
He claimed that he wants to preserve Ethereum’s decentralized spirit by having other entities stake on behalf of the network. This ensures that no single foundation has a significant influence on the blockchain.
For this reason, the nonprofit has prioritized funding development and operations directly, which Buterin argued is more in line with Ethereum’s long-term goals.
Special Offer (Sponsored) Binance Free $600 (CryptoPotato Exclusive): Receive an exclusive welcome offer of $600 on Binance when you register a new account using this link (more details).
Exclusive offer for 2024 on BYDFi Exchange: Welcome Reward up to $2,888. Register using this link and open a 100 USDT-M position for free!
