Source: TechFlow
Original Title: Ethereum Foundation Announces Layoffs, Is the Project Team Taking Action?
On June 2nd, the Ethereum Foundation (EF) announced changes to its internal protocol R&D team's operational approach, renaming the original R&D team from "Protocol R&D" to "Protocol", and stating that "some PR&D members will no longer continue working at the Ethereum Foundation" - the Ethereum Foundation has begun layoffs.
According to the EF's published guidelines, the goal of this reorganization is to make the team more focused and efficient. Additionally, the announcement mentioned that although some employees are being laid off, the foundation encourages them to continue contributing to the Ethereum ecosystem.
How Did It Come to Layoffs?
Foundation's Controversial Moves Displease the Community
The Ethereum Foundation's layoffs might not surprise anyone.
As early as March, the Ethereum Foundation underwent a leadership change. The controversial Executive Director Aya Miyaguchi, after 7 years, was promoted to EF Foundation Chair, moving from a position of real power to the foundation's "image representative".
The EF's leadership change sparked market discussion at the time: the market generally believed that Aya's resignation from her powerful position was the first step for EF to become more practical.
Over the past year, market dissatisfaction with EF has been building up, not only continuously selling $ETH but also frequently becoming a market focus with various operations.
After the Cancun upgrade in March 2024, Layer 2 transaction fees significantly decreased. Technically, this was absolutely good, but according to Token Terminal data, shortly after the Cancun upgrade, Ethereum Layer 1 network revenue dropped by 99% in the summer of 2024. Ethereum's failure to balance technological progress with the ecosystem's economic health deeply disappointed investors and the community.
In May 2024, EF was exposed to a major scandal where several Ethereum core members were found to be associated with the EigenLayer Foundation. EF's senior researchers Justin Drake and Dankrad Feist both served as paid consultants for EigenLayer, receiving millions of dollars in token incentives. This collaboration with obvious conflicts of interest caused continuous controversy in the community, and the impact of introducing EigenLayer's proof-of-stake protocol into Ethereum was hard to predict. Some community members lamented: "Foundation members have staked themselves in." It wasn't until November of the same year that Justin Drake and Dankrad Feis announced their resignation as EigenLayer advisors.
In August 2024, the Ethereum Foundation's lack of transparency in expenditures again became a focus. On August 24th, the Ethereum Foundation was reported to have transferred 35,000 $ETH (worth $94 million at the time) from the foundation's treasury to Kraken exchange. Even though the then-executive director Aya clarified that the fund transfer was a normal part of the foundation's "fund management" and not necessarily equivalent to a sale, the attitude of providing no notice and being unresponsive still caused widespread dissatisfaction. Combined with the foundation's continuous practice of selling $ETH to support its operational costs, it inevitably dragged the foundation's image to rock bottom.
Ethereum Has Become Too Detached from the Masses
Besides various sales, scandals, and opaque information that upset people, the Ethereum Foundation's direction itself has been disappointing.
In this cycle, $ETH's price has almost disappointed everyone, and the slogan "BTC breaks 100,000, ETH breaks 8,000" awkwardly only realized half of its promise, which is inseparable from the Ethereum Foundation's development direction in recent years. The foundation's leadership's overly idealistic vision and style can support the realization of a small group's aspirations, but for the community and market, such castle-in-the-air construction cannot be eaten.
X user Jason Chen once mentioned in a tweet: "Early Ethereum OGs have received too many dividends, showing absolutely no financial hunger, and if anyone shows an intention to make money, they would be rejected and looked down upon. This atmosphere from top to bottom has made Ethereum ecosystem developers very 'pure', yes, this word makes my head hurt. Every time I interact with these purists."
With continuous internal issues and external dissatisfaction continuing into this year, coupled with a price that doesn't seem to be long-term market-favored, the Ethereum Foundation might have finally become anxious.
This layoff might be an initial treatment for the long-standing illness of the Ethereum Foundation.
Is the Project Team Taking Action?
A New Strategy of Becoming Practical
Returning to the Ethereum Foundation's new resolution, the core logic of the entire plan is clear: less research, more delivery.
Not only laying off personnel who might have been theoretically discussing but never producing actual results, but also increasing accountability mechanisms and making ecosystem development KPI-oriented. The future will focus on the following three strategic directions:
Scaling Ethereum's base layer: Improving mainnet performance and throughput.
Expanding Blobspace for Rollups: Increasing data space required for Rollups, supporting Layer 2 solutions.
Improving user experience: Optimizing Ethereum network's usability and accessibility.
Regardless of future implementation progress, this strategy finally focuses on problem-solving, with "practicality" having a concrete presentation. (Editor's note: Especially regarding mainnet performance improvement, the recent situation where Binance Alpha's $PFVS airdrop caused mainnet transaction fees to spike to 70-80 dollars per transaction was quite awkward.)
Vitalik Starts Buying Coins, Foundation Seeks Sponsors
On June 4th, according to Decrypt, ConsenSys CEO and Ethereum co-founder Joe Lubin revealed that the company is negotiating with a sovereign wealth fund and bank from a "major country" about building infrastructure in the Ethereum ecosystem.
On the same day, X user Ember reported that Vitalik Buterin actively used 317,000 DAI + 33,000 $UNI to purchase 205.5 $ETH, and transferred a total of 693.9 ETH ($1.83M) and 340,000 USDC through the 0x1810 address using Railgun.
Facing the Future, Ethereum Still Needs to Solve More Problems
Whether it is the foundation's self-rescue or the inevitable result of the Ethereum Foundation's conceptual development, this reorganization reflects that pragmatism is now the basis for various projects to move forward. Even a giant like Ethereum cannot escape the law that castles in the air will eventually collapse, let alone public chains and applications with insufficient community support. The latest strategy clarifies the foundation's own attitude and development direction, but whether it can be effectively implemented remains the most critical step.
While focusing on pragmatism, the issues of transparent information disclosure and finding a balance between decentralized development concepts and centralized management remain unavoidable challenges in Ethereum's ecosystem development.
To reverse market attitudes, in addition to market support, Ethereum may need to repeatedly perform a "painful but necessary treatment".
