Ethereum Foundation Announces Expenditure, Vitalik Responds to Community Concerns

Recently, the funding usage and transparency of the Ethereum Foundation have sparked widespread discussion in the crypto community. In response, the foundation publicly disclosed its official expenditure at the end of August.

Data shows that "new institutions" account for the largest share of foundation expenditures, reaching 36.5%. This category includes grants provided to multiple organizations, such as the Nomic Foundation, L2BEAT, and others. The main goal of these new organizations is to strengthen the Ethereum community in the long term.

L1 research and development is the second largest expenditure category, accounting for 24.9% of total expenses. This category includes funding for external client teams (62%) and internal foundation researchers (38%). Internal spending covers multiple teams such as Geth, cryptographic research, Devcon, and Solidity.

The remaining expenditures of the foundation include community development ( 12.7% ), zero-knowledge applications ( 10.4% ), internal operations ( 17.7% ), developer platform ( 16.5% ), and L2 R&D ( 11.4% ).

Regarding the foundation's fund management plan, 15% of the remaining funds will be spent each year. This means that the foundation will exist in the long term, but its influence in the ecosystem will gradually diminish. A foundation member anticipates that the foundation still has about 10 years of operational funds, but this will vary with ETH price fluctuations.

On September 12, a wallet associated with Vitalik sold 190 ETH for approximately $441,000. In response, Vitalik explained that this was an automatic order set up at the end of August and stated that this was the last sale, intended to fund ecological defense projects. He emphasized that he has never profited from the sale of ETH, and all proceeds have been used to fund projects.

Regarding DeFi, Vitalik reaffirmed his commitment to the decentralized finance sector but stated that he would not invest in short-term projects with unsustainable prospects. Foundation member Dankrad Feist believes that the most valuable contribution of DeFi on Ethereum is decentralized stablecoins, but they currently face scaling limitations.

The Ethereum Foundation is actively researching multiple technical areas, including zero-knowledge proofs, verifiable delay functions, and maximal extractable value. Vitalik and other members discussed the possibility of using binary hash trees instead of Verkle trees in future technology upgrades.

Regarding the issue of ETH value accumulation, the foundation members believe that it is crucial for the success of Ethereum. They emphasize that ETH supports decentralized stablecoins as a currency and provides economic security for the network. Even if each transaction fee is very low, significant revenue can still be generated through a large number of transactions.

Regarding the centralization issues of Layer 2, Vitalik stated that highly decentralized L2 solutions essentially cannot encroach on user funds without reaching a strong consensus. He plans to only publicly mention L2 projects that are in a higher stage of decentralization starting next year.

Despite facing some skepticism, the Ethereum team is still actively responding to and resolving issues. As the largest application public chain, the fundamentals of Ethereum remain robust. The main challenge currently facing the industry is that applications are experiencing a bottleneck, but the low fees of L2 are driving the development of new applications. With the improvement of liquidity in the capital markets, the adoption rate of the crypto industry is expected to accelerate, and the future of Ethereum is still worth looking forward to.