Original author: Chen Jian Jason, independent researcher
Editor's note: On November 8th, the Ethereum Foundation released its 2024 report; details can be found here: (Quick read of the Ethereum Foundation report: 240 million USD spent over two years, with nearly 30% on L1 R&D). Independent researcher Chen Jian Jason has provided an interpretation and analysis on X. BlockBeats reprints the full text as follows:
The Ethereum Foundation has just released its 2024 report. What information can we glean from it? Let's take a look.
The opening emphasizes that the core values of Ethereum are: long-term thinking, subtraction, and value management. Regarding long-term thinking, it states that 'Ethereum is still very young, and the ecosystem may focus on very short-term goals, but the Ethereum Foundation should balance this trend, traversing the peaks and troughs of cycles,' and emphasizes that 'this means that some actions taken now may not yield any returns for decades to come.' It has already set the tone from the beginning that Ethereum is about long-termism, not influenced by market fluctuations in its decision-making.
Regarding subtraction, it states, 'We do not try to accumulate power and prestige; we are happy to credit others, support independent organizations, and work silently behind the scenes.' In fact, this point reflects what we previously said about Ethereum being completely altruistic, which leads to decisions like fully promoting L2, reducing DA costs, and allowing L2s to use something other than ETH for gas, burning itself to illuminate others.
From a moral and long-term perspective, I truly respect the Ethereum Foundation's values of self-discipline and restraint. However, from a business perspective, I am still skeptical whether this philosophy can be implemented in an organization valued at 300 billion USD. I am not saying that it must promote Meme culture or chase trends; I do not support that either; I just hope we don't have to be so self-sacrificing.
After setting the tone with values, the next topic is about how the foundation spends money. First and foremost, the major portion is in grants. I previously analyzed that over 60% of the funding is used to support various projects each year. Three cases were presented in the report: the first is the developer education platform @WTFAcademy_ created by @0xAA_Science, and the other two are the Security Alliance and Devcon. Therefore, for the Ethereum Foundation, education, security, and community are the top priorities. The image below shows the cost expenditure structure for 2023, totaling 130 million USD, with New Institution taking the largest share at 35%. This part refers to supporting some organizations and institutions within the Ethereum ecosystem. Then there is Community Development. To be honest, both of these areas have substantial benefits. I am not saying the Ethereum Foundation is corrupt, but I know several entities that actually cater to grant issuance standards to gain excessive returns. After all, the judgment of this part is quite subjective, unlike R&D which can have objective evaluation criteria.
Currently, there is still 970 million USD in the treasury, of which 80% is ETH. The report states that the Ethereum Foundation's financial goal is to provide funding for important public goods in the coming years, which requires periodic sales of ETH to ensure sufficient fiat currency. However, the report does not mention anything about staking ETH or how to increase the Ethereum Foundation's funding reserves.
The image below shows the funding reserves of the entire Ethereum ecosystem, totaling 22 billion USD. This includes funds from all projects that can be categorized as part of the Ethereum ecosystem, but it also reveals projects like MakerDAO and DYDX that are pivoting away from Ethereum towards Solana and Cosmos, as well as Polygon, which is hard to clearly define whether it 'belongs' to Ethereum. This is the issue I mentioned earlier: Ethereum is really too generous and selfless. It is like a very benevolent patriarch; no matter how mischievous the children are, it treats everyone well, regarding each one as its closest family member. Sigh, I respect it greatly, but...
Everyone has their own stance and views. A healthy ecosystem allows for the existence of all who can express their opinions with reason and evidence. Of course, malicious insults, criticism, and sarcasm are not acceptable. I still believe in Ethereum, respect Ethereum, and hold Ethereum, but many times I also feel helpless and powerless.
Additionally, I hope to see the Ethereum Foundation make greater improvements in transparency, especially regarding the entry and exit of core personnel. For example, I currently have not found any documentation on the election, appointment, and term processes for positions such as the chairperson and president of the foundation. I also hope that some grant distributions can be more transparent.
Note: There is currently a prevalent leftist atmosphere in Ethereum, where dissenting opinions are not tolerated, and criticism is met with accusations of FUD. Any such comments are met with immediate blocking, including those who think this article is FUD.
The original link is as follows: https://ethereum.foundation/report-2024.pdf
Original link
