Ethereum co-founder Vitalik Buterin addressed community concerns regarding the Ethereum Foundation’s decision to sell ETH rather than stake it.
The conversation started when one user tweeted, “Just stop dumping and you’ll be fine, bro.” Ethereum co-founder Vitalik Buterin was quick to respond.
Vitalik says he hasn’t sold any ETH in the past month
Buterin quickly clarified his personal position, saying, “I haven’t sold a single ETH in the past month.” He also added that the amount of ETH he held has actually increased.
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This raised further questions about the Ethereum Foundation’s activities, with user NEO asking specifically about the foundation’s sales practices.
In response, Buterin defended the Foundation’s approach, highlighting its important contributions:
“The ETH Foundation is paying the researchers and developers responsible for keeping Ethereum from losing 5 million ETH per year to proof-of-work.”
Brothers, the ETH Foundation
(i) Ethereum will not bleed 5 million ETH per year on proof of work
(ii) Today’s fees are low.
(iii) TX is included within 30 seconds instead of 1-30 minutes (eip 1559)
show some respect
— vitalik.eth (@VitalikButerin) October 26, 2024
The discussion deepened when community members brought up interesting comparisons to the Nobel Prize Foundation. Users questioned why the Ethereum Foundation did not stake all of its ETH holdings and only use the proceeds to cover operating costs.
This user specifically took issue with the Foundation’s normal sales practices. He also suggested that he has doubts about trust in Ethereum’s proof-of-stake system while ignoring market sentiment and community voices.
Buterin’s response reveals the complex considerations behind the foundation’s strategy. He explained that his main concern was to avoid a situation in which the foundation would have to make an “official choice” in the event of a controversial hard fork.
This strategic position is intended to maintain neutrality and ensure that no single entity has undue influence over the direction of the network.
One internal reason for this is that we don’t want to be forced to make a “formal choice” in the event of a controversial hard fork.
One interesting idea being considered in this regard is to give some grants in the form of “You can stake your ETH…”
— vitalik.eth (@VitalikButerin) October 27, 2024
To address these challenges, Buterin outlined two potential approaches.
First is a new grant structure that allows recipients to stake the Foundation’s ETH and keep the profits. This requires that staking decisions are ethical. This approach would decentralize staking decisions while preserving the foundation’s asset base.
Second, it distributes legitimacy and resources across multiple organizations representing Ethereum, reducing concentration of influence.
Mr. Buterin said that great progress had been made in this direction over the past two years. He also suggested that the ecosystem is becoming more decentralized.
63% of holders made a profit
According to IntoTheBlock data, 63% of holders are making profits at the current ETH price. Interestingly, 35% are in a loss position and 3% are at the neutral or break-even point.
These statistics provide important context for understanding community sensitivity to institutional sales practices. According to the latest data, Ethereum price is trading at $2,460 at the time of writing, with no significant movement in the past 24 hours.
ETH price has also fallen by nearly 7% in the past seven days. Ethereum was hovering around the $2,700 level a week ago. However, the price of ETH has fallen due to the overall market situation.
