SNEAK PEEK
Ethereum Foundation to release a financial report addressing spending transparency concerns.
Foundation’s $650M holdings allow for a 10-year budget; transparency under community scrutiny.
Significant ETH transfers spark backlash; Foundation explains treasury management practices.
The Ethereum Foundation is preparing to release a detailed financial report in response to growing community concerns about its spending practices. This follows recent scrutiny regarding the foundation’s budget strategy and transparency, particularly after significant movements of ether from its main wallet.
In a recent ask-me-anything (AMA) session on the r/ethereum subreddit, Justin Drake, a researcher at Ethereum, shared insights into the foundation’s financial management. According to Drake, the Ethereum Foundation currently holds approximately $650 million in its main wallet and has a budget that allows for about ten years of operation.
Vitalik Buterin said in Reddit that the current budget strategy is roughly to spend 15% of remaining funds each year. This means that EF will last forever, but as part of the ecosystem it will become smaller and smaller over time. https://t.co/B0VPkd09Wm
— Wu Blockchain (@WuBlockchain) September 6, 2024
Drake further revealed that the foundation is expected to publish a financial report soon, similar to the one released in April 2022. This report aims to address the community’s concerns about the foundation’s spending and provide greater transparency.
The spending approach as noted by the ethereum creator, Vitalik Buterin, seeks to spend about $15 million in every year. This way, Buterin pointed, would help sustain the Ethereum Foundation in the long-run while slowly decreasing its proportional stake in the longer term.
The foundation has been accused of embezzlement of funds through several large ether transfers which raised concerns from the community over the foundation’s operations.
Last month, the blockchain analytics provider Lookonchain reported a transfer of 35,000 ETH, valued at $94.07 million, from the foundation to the Kraken exchange. This move led to significant backlash, with community members expressing their frustration over the lack of prior communication.
Addressing the concerns, Ethereum Foundation Executive Director Aya pointed out that the transfers was a normal undertaking in the management of the foundation’s treasury. She added that most of the funds are directed towards the grants and salaries which are legal tender, therefore, needs to be converted into fiat money.
Miyaguchi also highlighted that the foundation could also go through a time it could not be involved in treasury operations because of legalations and this made it difficult for them to make a notice to the community earlier.
The post Ethereum Foundation to Release Financial Report Amid Community Concerns Over Spending appeared first on Today NFT News.
