Interpretation of EF report: Its "great love" concept seems to be hindering business development
Original author: Jason Chen, independent researcher
Editor's note: On November 8, the Ethereum Foundation released its 2024 report. For details, see: Quick Reading of Ethereum Foundation Report: Two Years of Spending $240 Million, L1 R&D Accounts for Nearly 30%. Independent researcher Jason Chen interpreted and analyzed this on X. BlockBeats reproduced the full text as follows:
The Ethereum Foundation has just released its 2024 report. What information can be interpreted from it? Let's take a look.
At the beginning, it emphasizes that Ethereum's core values are: long-term thinking, subtraction, and value management. Regarding long-term thinking, it says "Ethereum is still very young, and the ecosystem may focus on very short-term goals, but the Ethereum Foundation should balance this trend and cross the peaks and troughs of the cycle", and emphasizes that "this means that some actions at the moment may not have any rewards in the next few decades." The tone has been set at the beginning. Ethereum is a long-termist and its decisions are not affected by market fluctuations.
In the subtraction part, it says "We do not try to accumulate power and prestige, and are happy to attribute credit to others, support independent organizations, and work quietly behind the scenes." In fact, this is what we said before that Ethereum is completely altruistic, and thus will make decisions such as pushing L2 with all its strength, reducing DA costs, and allowing L2 to not use ETH for Gas, which burns itself to illuminate others.
From a moral and long-term perspective, I really respect the Ethereum Foundation's values of self-discipline, but from a business perspective, I still have doubts about whether this concept is too advanced for an organization with a market value of 300 billion US dollars. I am not extreme in saying that we must promote memes and hype hot topics, and I don't support it, but we should not be so selfless.
After adjusting the values and setting the tone, the next thing is to talk about the foundation's spending. First of all, the bulk of it is still grants. I have analyzed before that more than 60% of its funds are used to fund various projects every year. There are a total of three cases in the report. The first one is @WTFAcademy_, the developer education platform run by @0xAA_Science. The other two are the Security Alliance and Devcon. Therefore, for the Ethereum Foundation, education, security and community are the three most important. The figure below shows its cost expenditure structure in 2023. A total of 130 million US dollars were spent, of which New Instution accounted for the largest 35%. This part refers to some organizations and institutions that support the Ethereum ecosystem, and then Community Development. To be honest, these two parts are very profitable. I am not saying that the Ethereum Foundation is corrupt, but I know that there are actually many people who are targeted to meet the Grant issuance standards to obtain excess returns. After all, the judgment and issuance of this part are more subjective, unlike R&D, which can have objective evaluation standards.
There are currently 970 million US dollars in the treasury, 80% of which are ETH. The report says that the Ethereum Foundation's financial goal is to provide funds for important public goods in the next few years, so it is necessary to sell ETH regularly to ensure that there is enough legal currency, but the entire report does not mention the pledge of ETH, nor does it say how to increase the Ethereum Foundation's capital reserves.
The figure below shows the capital reserves of the entire Ethereum ecosystem, which is 22 billion US dollars. This is the money in the treasury of all projects that can be classified as Ethereum ecosystems, but you can also see projects such as MakerDAO and DYDX that backstab Ethereum to Sol and Cosmos, as well as Polygon, which is really difficult to clearly define whether it "belongs" to Ethereum. This is the problem I mentioned above. Ethereum is really too selfless. It is like a very kind parent. No matter how naughty the children are, it will always be good to everyone and regard everyone as its closest family. Alas, I respect it very much, but...
Everyone has his or her own position and opinion. A healthy ecosystem allows all people who can express their opinions with reason and evidence to exist. Of course, malicious insults, criticisms, and yin and yang are definitely not acceptable. I still believe in Ethereum, respect Ethereum, and hold Ethereum, but I often feel helpless and powerless.
In addition, I actually hope to see the Ethereum Foundation make greater improvements in transparency, especially the entry and exit of core personnel, such as the election, appointment, and term of office of the current chairman and president of the foundation. I have not found any explanatory materials at present. And I hope that the issuance of some Grants can be more transparent.
Note: Ethereum now has a trend of white leftists, that is, they cannot listen to others' opinions or bad things. As long as they hear it, they will say that you are Fud, all kinds of sarcasm and even abuse, which is simply playing a literary inquisition. I will not reply to this kind of people when I encounter them, and I will block them directly, including those who think that this article is Fud.
The original link is as follows: https://ethereum.foundation/report-2024.pdf
