Amid a broader market downturn and an 8% drop in ETH over the past 24 hours, the Ethereum Foundation’s (EF) spending practices have drawn attention and criticism.
EF’s Spending
Vitalik Buterin, co-founder of Ethereum, addressed concerns over the Ethereum Foundation’s spending habits as the cryptocurrency struggles to reach the $3,000 mark. This comes during a wider market downturn, with ETH seeing a significant decline compared to Bitcoin and Solana. The EF previewed its 2022-2023 financial report, providing insights into its internal and external expenditures.
EF’s Resource Allocation
The financial 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. Consequently, a larger portion of the budget was invested in external projects.
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 clarified that this category includes organizations like @NomicFoundation, @TheDRC_, @l2beat, @0xPARC, and not the World Economic Forum’s insect protein research. Ambiguity surrounding spending categories like “new institutions” had sparked skepticism about the EF’s financial transparency and its commitment to decentralization and innovation.
Despite efforts to provide transparency, community concerns persist. Some community members are calling for consistent transparency regarding fund transfers and sales, while others have adopted a more sarcastic tone towards Buterin’s remarks.
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