Original Title: Ethereum Foundation Report
Original Author: Ethereum Foundation
Original text translation: Odaily Planet Daily
What is the Ethereum Foundation?
The Ethereum Foundation (EF) is a non-profit organization that supports the Ethereum ecosystem and is part of a community composed of organizations, individuals, and companies that fund protocol development, grow the community, and promote Ethereum.
EF is at the forefront of a new type of organization: supporting the blockchain ecosystem without controlling it. This prompts everyone to think daily about what kind of organization EF needs to become to support Ethereum's long-term development.
EF itself is divided into many separate teams, believing that small autonomous teams are the most effective structure for getting work done. New teams typically grow organically by forking existing teams in response to new demands in the ecosystem.
The EF team contributes to many different parts of the Ethereum ecosystem. Some teams build software or explore the cutting edge of the Ethereum roadmap; some teams help cultivate the ecosystem of developers and users worldwide; others help promote the utility and potential of Ethereum to the world.
Core Values
In the past 10 years, EF has experienced the ups and downs of Ethereum's brief history.
This experience has provided us with many lessons. Over time, three important ideas have emerged that help guide EF and inform our decisions.
These are our three core values: long-term thinking, subtraction, and value management.
Long-term Thinking
Ethereum has not been around for long, and the ecosystem sometimes focuses on very short-term goals and cycles. EF should balance this trend: moving beyond the peaks and valleys of market cycles to focus on long-term prospects. This means EF is willing to take actions now that may not yield returns for years or decades, or even actions that may not yield any results.
Subtraction
Subtraction means that we do not seek to accumulate power and prestige. Our success is measured by the achievements of the Ethereum ecosystem, not by the accomplishments of EF. We gladly give credit to others, support independent organizations, and work quietly behind the scenes.
Subtraction stems from an observation: organizations—non-profits—naturally desire to accumulate power. But this cannot happen in organizations like EF that support decentralized blockchains; to counter this default path, EF needs to take proactive measures.
Value Management
Ethereum is more than just technology. It is a community bound by a set of shared values, with a vision of how those values can improve the world. The Ethereum ecosystem stands on the shoulders of the long history of the open-source and cypherpunk communities, paving the way for us.
EF Activities and Expenditures
Ethereum Foundation Team
EF includes many teams contributing to the Ethereum ecosystem across a broad range of areas. Most teams contribute to critical Ethereum infrastructure, while a few others research and manage the Ethereum roadmap or help coordinate the ecosystem. Team case studies are as follows:
Robust Incentives Group (RIG): Dedicated to Ethereum mechanism design and cryptoeconomics research. RIG's work depicts all the ways incentives directly or indirectly affect Ethereum users and protocol stakeholders. Wherever possible, RIG proposes mechanisms to restore incentive compatibility and system optimality.
Protocol Support Team: The protocol support team ensures that Ethereum has the right people, processes, and perspectives to support its long-term maintenance. In practice, this team helps facilitate network upgrades (AllCoreDevs, EL specifications), attract and retain protocol contributors (Ethereum Protocol Grants), and undertake various other projects related to Ethereum's sustainability.
Developer Conference (Devcon): Hosts and supports events like Devcon to promote collaboration, education, and advocacy for Ethereum's values and mission. As the community has grown, the team has expanded Ethereum’s global impact through community-driven gatherings like Devconnect, support for global non-EF events, and regional initiatives such as the Road to Devcon funding program.
Ethereum Foundation Funded Projects
EF supports important work across the ecosystem through funding. Grants come in various sizes and forms, with many EF teams playing roles in approving and assessing grants. The Ecosystem Support Program (ESP) regularly reports on grant activities. Grant case:
WTF Academy: WTF Academy creates free, open-source, concise, and community-reviewed tutorials on Web3 development tools, including Solidity, Ethers, etc., with a focus on Chinese content. ESP funding helped them expand their courses and translate more content into English. Awarded $30,000 in November 2022.
Safety Alliance: The Safety Alliance is committed to creating a safer ecosystem. They achieve this through projects like SEAL Team 911, White Hat Safety Harbor Agreement, their safety framework, and SEAL Team wargaming. Their efforts assist projects and users through proactive safety measures and passive incident handling, helping to prevent financial losses. Awarded $130,000 during 2022 - 2023.
Devcon University Roadshow: Events held at five universities in Thailand aimed at introducing students to the Ethereum ecosystem, educating them about Ethereum, and providing them with job opportunities. Awarded $10,000 in April 2024.
Evolving Ethereum Institutional Ecosystem
Ethereum is a massive global project. There is an incredible scope and diversity of work across all levels of the Ethereum ecosystem and around the world.
Today, many individuals and organizations contribute to this work, but there is still much work to be done, especially in supporting and maintaining public goods. Relying on one or a few organizations to do most of the work poses a risk to the ecosystem.
This phenomenon leads EF to prioritize the development of many independent organizations that can strengthen and support the ecosystem, thus sharing the responsibility for Ethereum's health, maintenance, and development.
In the past two years, EF has been dedicated to nurturing and supporting many new organizations that are pushing the Ethereum ecosystem forward, such as Argot Collective, Geodework, L2BEAT, Nomic Foundation, and 0xPARC. We are very proud to work alongside them.
Argot Collective: Argot Collective is a newly established non-profit, democratic organization dedicated to maintaining Ethereum's freedom and independent software. Argot is composed of about 25 former Ethereum Foundation team members, including compiler engineers, programming language theorists, and verification experts, focusing on core infrastructure development without commercial pressure. Their mission emphasizes long-term sustainability and transparency, opposing profit-driven motives. Argot is the new home for current Ethereum Foundation internal teams working on Solidity, Fe, Formal Verification, and Sourcify. While Argot is expected to retire in the future and start new projects, they are fully committed to the long-term maintenance and development of Solidity for as long as the community finds it useful (Argot.org).
Geodework: Geodework is a public interest organization committed to the development of the Ethereum ecosystem and building a better internet. Its core focus is on pursuing geographic decentralization of Ethereum, which means building community and educational infrastructure and supporting local innovators and leaders around the world. In practice, Geodework facilitates funding, creates ecosystem tools, products, and services, and executes a range of projects aimed at strengthening the Ethereum community layer. Geodework is currently developing within EF and will share more information in early 2025.
L2BEAT: L2BEAT provides analysis, research, and tools related to Ethereum Layer 2 scaling projects. It was created to offer transparent and verifiable insights into emerging second-layer technologies aimed at scaling Ethereum and to monitor different second-layer technologies, primarily focusing on the safety of user funds. L2BEAT tracks the progress of projects committed to becoming trust-minimized L2s. Their goal is to provide the community with up-to-date information about the status of these projects and to offer insights and guidance towards achieving full trust minimization.
Nomic Foundation: The Nomic Foundation is an early non-profit organization that provides open-source engineering software, dedicated to advancing the Ethereum ecosystem. Their ultimate goal is to ensure that Ethereum continues to provide a high-quality, reliable developer experience and, by doing so, helps Ethereum and the broader decentralized movement reach its full potential, creating a world that offers more autonomy and choices to millions (economic basis).
0xPARC: 0xPARC accelerates the development and deployment of programmable cryptography. They operate, fund, and support teams working across the full stack. This includes research on zero-knowledge cryptography, secure multi-party computation, homomorphic encryption, program obfuscation, and deploying these technologies into user applications such as autonomous worlds and identity.
EF Expenditures 2022
EF Expenditures 2023
Expenditure Category Description
L1 R&D: This category includes all R&D related to mainnet upgrades, Geth, internal security research, cryptography R&D, economic modeling, and mechanism design, as well as long-term research aimed at realizing the Ethereum community roadmap, and funding for external execution and consensus layer clients. Additionally, it includes many other funding projects for external teams, such as network stress testing and external research on specialized cryptography.
L2 R&D: Includes support provided to internal teams that contribute to L2 research and development, and funding provided to external groups to improve the L2 ecosystem. These funding projects cover educational resources, block explorers, developer tools, security audits, and more.
Applied ZK R&D: Includes funding support for teams exploring privacy and scalability, with projects like MACI, Anon Aadhaar, TLS Notary, etc. Additionally, multiple grants are provided, from ZK development tools and ZK ritual design user experience to ZK application proof of concept.
Developer Platform: Covers all work related to elevating Ethereum as a developer platform, including projects for development libraries like Solidity, Remix, Ethers.js, and Web3.js, as well as support for the Python ecosystem.
Community Development: Includes various work supporting different parts of the Ethereum community, covering interactions with the core protocol community (like supporting the staking community), Next Billion team, Devcon and Devconnect events, Ethereum.org and other educational resources. Additionally, multiple grants have been provided to local and regional Ethereum communities and events worldwide.
Internal Operations: Covers general expenses that support all teams within EF, including all costs related to internal and external legal, accounting, and financial services, as well as organization-wide subscriptions and service providers, such as data services, operational tools, and technical infrastructure. It also includes investment costs related to financial management strategies, as well as salaries for all operational and administrative personnel.
New Institutions: Includes funding for new institutions to support the Ethereum ecosystem. During 2022 and 2023, this includes funding for organizations such as Nomic Foundation, 0xPARC, L2BEAT, and others.
Ethereum Foundation Fiscal Reserves
As of October 31, 2024, the total fiscal reserves held by the Ethereum Foundation (EF) amount to approximately $970.2 million, which includes $788.7 million in crypto assets (including the remaining 26,701 ETH committed for the customer incentive program) and $181.5 million in non-crypto investments and assets.
The vast majority (99.45%) of crypto assets are held in the form of ETH. These ETH account for 0.26% of the total supply of ETH as of October 31, 2024.
We choose to hold most of our fiscal reserves in ETH to reflect the Foundation's confidence in Ethereum's potential, and the ETH we hold also represents this long-term perspective.
At the same time, the goal of the Foundation's fiscal reserves is to provide funding support for important public goods in the Ethereum ecosystem for years to come.
To achieve this goal, we follow a conservative fiscal reserve management policy to ensure that there are sufficient resources even during prolonged market downturns. This requires us to regularly sell ETH to ensure ample reserves for the coming years while programmatically increasing fiat reserves during bull markets to support expenditures in bear markets.
Ecosystem Rising, Facing Challenges
Ethereum Ecosystem
In recent years, the Ethereum ecosystem has been continuously evolving. There are now many organizations and institutions contributing to Ethereum and pushing its boundaries forward, including companies, non-profits, DAOs, L2 organizations, and more. Our ecosystem has never been stronger.
As the ecosystem develops, these organizations are contributing more funding to the Ethereum community.
Total treasury of the Ethereum ecosystem
By the end of 2024, the Ethereum ecosystem will be supported by billions of dollars in funding from foundations, organizations, and DAOs.
This chart shows the total value held by project treasuries. This includes liquid amounts available for projects as well as amounts still vesting. All non-EF data is sourced from Deep DAO (deepdao.io/organizations) as of October 17, 2024.
Most project treasuries primarily consist of the project's native tokens. This means that the total value of the project treasury is far greater than the total value that can be deployed immediately in fiat. If a project attempts to sell a significant portion of its funds, it could have a substantial impact on the price of the underlying tokens.
On the contrary, this chart shows us the depth of long-term available resources in the Ethereum ecosystem. Even a small portion of capital gradually deployed over the next ten years will provide significant resources for the growth and maintenance of the Ethereum ecosystem.
Total funds deployed in the Ethereum ecosystem from 2022 to 2023
In 2022 and 2023, organizations in the Ethereum ecosystem deployed over $497 million to support projects across the community.
In collecting this data, we used a broad definition of ecosystem funding. This includes funding for Ethereum public goods (such as protocol associations) as well as funds for larger projects within the Ethereum ecosystem (for example, funding for products built on specific L2s). This data excludes equity investments or similar funding and does not include airdrops from token generation events.
Dollar values are calculated using the asset price applicable at the end of the year or known information on the specific grant date.
This information was gathered by researching public information and contacting 94 organizations within the Ethereum ecosystem. However, existing data is quite fragmented, and some projects did not respond to our inquiries. This data also does not include many organizations’ internal expenditures, which often contribute to Ethereum public goods. This data should be regarded as incomplete.
We included data about grant distribution platforms (like Gitcoin). Funds associated with these platforms often come from donations by other organizations (e.g., EF). We removed duplicate data as much as possible to avoid double counting.
