Ethereum Foundation Discloses Expenditure Following Speculation on Large Transaction
The Ethereum Foundation (EF) contributor, Josh Stark, recently disclosed the organization’s financial outlays over the past two years on social media on August 27. This revelation came amidst speculations that the foundation might be contemplating a significant Ethereum sell-off following a substantial transfer from a foundation-linked wallet, fueling these rumors.
Stark hinted at the foundation’s plan to release an expenditure report before this year’s Devcon, slated for November 12. The breakdown of funding revealed by Stark included two pie charts illustrating the division of funds for 2022 and 2023 across seven key areas: new institutions, L2 R&D, applied ZK, community development, developer platform, internal ops, and L1 R&D.
In both years, the highest funding was allocated to research and development (R&D) for Layer 1 improvements and new institutions. Stark clarified that these graphs encompass both internal and external spending, with internal spending accounting for around 38% and external spending for about 62% in both years.
Internal spending pertains to teams operating under the EF umbrella in various sectors like client Geth’s, Solidity, Devcon, and the Ethereum Organization’s teams. On the other hand, external spending relates to grants disbursed by the foundation’s Ecosystem Support Program (ESP), which provided $91.1 million in grants to 895 different projects between 2022 and 2023.
Stark highlighted ESP’s quarterly reports on grants awarded to new projects, with the latest edition detailing the grants provided in 2024 Q1. Regarding the “new institutions” category, Stark emphasized that it represents the foundation’s initiative to bolster new organizations supporting the Ethereum ecosystem in the long term, citing entities like the Nomic Foundation, the Decentralization Research Centre, and L2Beat.
Vitalik Buterin, Ethereum’s co-founder, endorsed Stark’s post, underscoring the significance of investments in new institutions. He dismissed any notion of World Economic Forum insect protein research being part of the foundation’s fund allocation.
The funding breakdown came after a substantial 35,000 ETH transfer from EF’s wallet to the Kraken exchange on August 23, amounting to $94 million at current prices. This transaction triggered debates within the crypto community concerning the allocation of these funds, particularly amid a 22% decline in ETH value over the past month.
DCInvestor suggested dividing future large transactions into smaller movements to alleviate concerns of a market dump. Buterin responded, highlighting logistical challenges in coordinating multiple transfers from a multi-sig wallet requiring four confirmations, emphasizing the need for caution in security-sensitive matters.
