How much money the Ethereum team has spent over the past few years. Why ETH “hid” their budget
The Ethereum Foundation (EF), the organization behind the development of the Ethereum blockchain, has published a financial report disclosing reserves - for the first time in 2.5 years. One of EF's innovations was a policy governing conflicts of interest. It spells out rules for employees regarding investments in individual ecosystem projects, as well as employment outside of EF.
The report comes days after two Ethereum Foundation (EF) developers, Justin Drake and Dankrad Feist, left the Eigenlayer project. This commercial project is the largest restacking protocol in the Ethereum ecosystem. Eigenlayer has raised more than $12 billion in user deposits, according to Defillama as of Nov. 8.
EF, on the other hand, is non-profit and observes neutrality, both in terms of investing in new projects and supporting existing ones. The revenue EF developers receive from independent commercial Ethereum-based projects could affect their decisions within the fund's operations.
Restaking is a technology for reusing cryptocurrency that is locked in a steaking blockchain to secure third-party applications as an additional revenue-generating tool.
Staking is a way of passive earning in which users blockchain coins to make some blockchain work. This entitles them to a profit, which is formed from a share of the issuance of new coins, as well as a portion of the commissions that users pay on the network for transactions.
In May 2024, information that two EF employees hold senior positions in Eigenlayer sparked heated discussions. These included Vitalik Buterin and Jordan Fish, a well-known analyst in the crypto community. As The Block wrote, citing Drake's words, the payment for his work in the project amounted to “millions of dollars” in Eigenlayer tokens. This is what caused the discontent, as the Eigenlayer project is the third largest user deposit among all decentralized financial applications.
Ethereum Foundation Executive Director Aya Miyaguchi responded to the community's concerns by promising to formalize the conflict of interest policy, “We will accelerate this work and share an update soon.”
As a result, EF imposed restrictions on its employees to work in third-party crypto projects, limiting them to investing in liquid crypto assets to $500k, and participating in early rounds of funding for crypto startups to a one-time amount of $100k and $400k per year. Exceeding the limits and stipulated conditions are discussed on a case-by-case basis.
How much money do ETH developers have
The Ethereum Foundation report shows that on October 31, 2024, EF's balance is approximately $970.2 million, where $788.7 million is in cryptocurrencies and $181.5 million in non-cryptocurrency investments and assets. This coincides with data from the Ethereum blockchain - as of November 8, 2024, according to Etherscan data, the fund's address holds more than 270k ETH (almost $790m) and about $700k in other cryptocurrencies, including more than $620k in the “wrapped” ether token WETH.
Blockchain is an open registry of information about all user balances and transactions on the network. Thus, knowing the blockchain address of a person or organization, anyone can examine the history of transactions at any time. Services such as Etherscan allow you to explore data from the Ethereum blockchain.
According to official EF information released in April 2022, the fund had $300 million in non-cryptocurrency assets and roughly $1.3 billion in cryptocurrencies. EF has not publicly reported its balance sheet since then. The vast majority of assets in the ETF's account (99.45%) are held in ETH, which amounted to about 0.26% of the total coins in existence.
In 2023, the organization spent $135 million, of which 63% went to sponsoring new projects and initiatives to grow the Ethereum ecosystem. 37% of the spending went to improving the underlying infrastructure of the Ethereum blockchain.
The budget for EF is about $100 million a year, and that money is predominantly for grants and salaries, as Miyaguchi previously stated.
“We decided to hold most of our assets in $ETH ETH because we believe in the potential of Ethereum,” the report noted, indicating that the fund also needs cash assets to cover expenses during the bear market.
The publication of the EF report in early November was the first in more than 2.5 years. The reason for the resumption of financial information may have been the community's fierce reaction to a number of large “sales” of Ethereum coins this year. According to Etherscan, since the beginning of 2024, EF has transferred about 44,000 ETH, or about $127 million at the exchange rate as of Nov. 8.
Another reason for the resumption of the report's publication could be the improving regulatory environment. According to Aya Miyaguchi, the fund was advised not to engage in any financial activities in 2024 due to regulatory complexities, which affected disclosure.
