Key Points
- Ethereum Foundation’s spending practices under scrutiny amid market downturn and ETH’s drop.
- Critics question the foundation’s financial transparency and allocation of resources.
Vitalik Buterin, co-founder of Ethereum (ETH), has addressed concerns over the Ethereum Foundation’s (EF) spending habits as the cryptocurrency struggles to reach the $3,000 mark.
This comes during a wider market downturn, with ETH seeing a significant 8% drop in the past 24 hours, a more significant decline than Bitcoin (BTC) and Solana.
EF’s Resource Allocation
The EF previewed its 2022-2023 financial report in a thread, providing insights into its internal and external expenditures amid growing debate over resource allocation.
The report indicated that the EF’s spending was divided into internal and external categories, with 38% allocated to the EF’s researchers and development teams, and 62% covering grants and payments to external teams and partners working on ETH-related projects.
The EF, therefore, invested a larger portion of its budget in external projects than in its own operations.
Details of EF’s Spending
The report also highlighted a new spending category named “New Institutions”, reflecting the EF’s efforts to support emerging organizations that can enhance the Ethereum ecosystem.
Buterin joined the discussion to clarify that the “new institutions” category included organizations like @NomicFoundation, @TheDRC_, @l2beat, @0xPARC, and not the World Economic Forum insect protein research.
The ambiguity surrounding spending categories like “new institutions” had sparked skepticism about the EF’s financial transparency and its commitment to decentralization and innovation. Critics argued that the EF’s financial reports lacked clarity and detail, raising concerns about the efficiency of fund allocation for the ETH ecosystem.
Despite efforts to provide transparency, community concerns persist. Some community members have called for consistent transparency around fund transfers and sales, while others have taken a sarcastic tone towards Buterin.
The impact of the upcoming financial report on the ongoing debate around decentralization and innovation is yet to be seen. However, it promises greater transparency in the EF’s resource allocation and invites the community to scrutinize how these efforts align with ETH’s mission.
