Can 1 billion US dollars save Ethereum? Analyzing Dankrad Feist's proposal and the EF governance crisis

Ethereum is experiencing a rare internal shake-up. In May 2026, former Ethereum Foundation core researcher Dankrad Feist proposed a bold idea on social platform X — to raise at least $1 billion to establish a new organization deeply aligned with Ethereum at the economic level to "save" Ethereum. This statement quickly sparked intense debate within the community, pushing the ongoing Ethereum Foundation governance crisis to a new high point.

To understand the origins of this proposal, we need to first look back at recent internal changes within the Ethereum Foundation. Since early 2026, the foundation has lost at least eight core members. From co-CEO Tomasz Stańczak’s departure in February, to Josh Stark and Trent Van Epps leaving in April, then Barnabé Monnot and Tim Beiko stepping down from leadership roles in May, and Alex Stokes going on leave, until May 19 when two senior researchers, Carl Beek and Julian Ma, announced their resignations — eight senior executives left in five months, with five leaving just in May.

The resumes of these departures are significant. Carl Beek spent seven years at the foundation, deeply involved in Beacon Chain development, and was one of the key drivers behind Ethereum’s 2020 transition to proof-of-stake consensus; Julian Ma worked at the foundation for about four years, focusing on mechanism design, cryptoeconomics, and protocol scaling, and co-authored the FOCIL proposal to enhance censorship resistance. Their collective exit has been widely seen as a "talent exodus" in the industry.

Against this backdrop, Feist’s proposal is viewed as a direct response to the foundation’s current situation.

The Core of the Issue: Feist’s Three-Layer Architectural Logic

Dankrad Feist’s proposal is not a spontaneous emotional appeal but a well-structured organizational design with a clear logical framework, which can be understood on three levels.

Feist’s core judgment is that there is a "limited alignment" problem between the Ethereum Foundation financially and the Ethereum network. Data shows that the foundation currently holds less than 0.1% of the total ETH supply, with no staking income or revenue from transaction fees. This means the foundation’s financial health is almost completely decoupled from ETH’s market performance — Ethereum’s long-term economic success does not directly translate into resource growth for the foundation, which also lacks direct economic incentives to drive ETH value upward.

Organizational Construction

Based on this diagnosis, the new organization Feist proposes must meet several hard criteria: raise at least $1 billion; appoint a "capable and willing to drive change" leader; establish accountability mechanisms, including a board composed of those who want ETH prices to rise, and a clear charter requiring the organization to be responsible to Ethereum; achieve sustainable funding through staking income and other channels, with dynamic adjustments via governance mechanisms.

Notably, Feist defines the $1 billion as a starting figure, not an upper limit. Considering Ethereum’s total market cap of about $250 billion, this amount accounts for roughly 0.4%, which he considers a "quite reasonable" scale.

Strategic Goals

In Feist’s vision, the core mission of the new organization is not only to maintain the ecosystem but also to actively promote ETH price growth. This sharply contrasts with the Ethereum Foundation’s self-described positioning — outlined in a 38-page authorization document published in March 2026 — which states it is "not a marketing organization," "not a casino," and "not speculators."

The document defines the foundation’s role as one of many guardians, rather than an advocate for Ethereum, emphasizing core principles like censorship resistance, open source, privacy, and security (CROPS) as unshakable.

The Structural Dilemma of the Ethereum Foundation

Before assessing whether Feist’s proposal is feasible, it’s necessary to delve deeper into the current challenges faced by the Ethereum Foundation.

Misaligned Financial Mechanisms

The Ethereum Foundation is not a typical commercial entity; its operational funds mainly rely on the sale of ETH reserves. In recent years, the foundation has shifted strategies from regularly selling ETH to staking some ETH to fund operations. In February 2026, the foundation launched a staking plan targeting 70,000 ETH, with an expected annual yield of $3.9 million to $5.4 million. However, the core issue Feist points out remains: the foundation’s ETH holdings are minimal, and it does not receive direct revenue from Ethereum’s economic activity.

Governance and Communication Vacuum

It’s noteworthy that, despite this wave of senior departures, the Ethereum Foundation has yet to provide detailed explanations for each departure or systematically respond to external criticisms of its leadership and strategic direction. This silence has, to some extent, increased community uncertainty. The foundation’s official stance is that these personnel changes are part of organizational evolution, but external observers speculate that internal debates over Layer 2 scaling priorities, financial management, and governance transparency may also be contributing factors.

Gap Between Reform and Reality

In fact, Vitalik Buterin announced a major overhaul of the foundation’s leadership structure as early as January 2025, claiming the reform had been ongoing for nearly a year. His goals included improving technical expertise within leadership, enhancing two-way communication with the ecosystem, recruiting new talent to boost execution, and more actively supporting application developers.

Yet, more than a year later, the situation has not significantly improved. Many researchers once considered core to the foundation have left, and reforms seem unable to withstand personnel upheavals.

Community Sentiment: Divisions and Concerns

Feist’s proposal has sparked two very different voices on social media and crypto media.

Supporters’ Logic: Using Economic Incentives to Correct Governance Failures

Supporters believe Feist’s diagnosis hits the long-term pain points of the Ethereum ecosystem. The foundation’s current structure is decoupled from ETH’s economic performance, leading to a lack of clear motivation to address market concerns. An organization with $1 billion in funds, economically aligned with Ethereum’s fortunes, would more directly represent the interests of ecosystem stakeholders.

Additionally, some community members have expressed doubts about the foundation’s recent behavior. The authorization document published in March 2026 not only contains some ambiguous and suggestive imagery but also references the controversial Miladys NFT series, which some see as undermining the document’s seriousness. David Hoffman, co-founder of the popular podcast Bankless, even disclosed that he has fully liquidated his ETH holdings, further amplifying community unease.

Opponents’ Warnings: Risks of Centralization Cannot Be Ignored

Counterarguments also deserve serious consideration. Some community members warn that if a single organization can exert significant influence over Ethereum governance, hard fork schedules, and network development, Ethereum risks becoming "just another enterprise blockchain," fundamentally contradicting decentralization principles.

Feist responded that the new organization "does not necessarily need to have full control over Ethereum’s development," but should have "significant influence." This statement not only failed to dispel doubts but also sparked further questions about the boundaries of influence.

ETH Price Continues to Underperform, Emotions Spread

The intensity of community discussion is directly related to ETH’s price performance. According to Gate data, as of May 25, 2026, ETH was trading at $2,104.89, down 6.19% over the past week, 5.70% over the past 30 days, and 15.58% over the past year. Since the start of 2026, ETH’s price has steadily declined from around $3,000, with nearly a 30% drop this year. ETH’s performance has lagged behind Bitcoin, and JPMorgan analysts suggest that if network activity does not improve significantly, this trend may continue.

Santiment data shows that Ethereum’s social sentiment has shifted from "patience" to "frustration," with more voices describing it as "dead money." The US spot ETH ETF recorded net outflows for ten consecutive trading days in May, totaling about $216 million.

These factors have combined to push community dissatisfaction to its highest point in recent years, and Feist’s proposal has attracted far more discussion than usual.

Multi-Dimensional Industry Impact Assessment

Feist’s proposal and the ensuing debate have multi-layered implications for the crypto industry.

Challenges to Ethereum’s Governance Model

This event touches on a fundamental issue in decentralized governance: can a non-profit organization that does not aim for profit effectively drive the value growth of an asset worth hundreds of billions of dollars? The Ethereum Foundation positions itself as "one of many guardians" rather than a promoter of the network. But in the current market environment, whether this restrained stance can sustain the ecosystem’s competitive edge is increasingly questioned.

Acceleration of Talent Mobility

The trend of core developers and researchers leaving the foundation may, in the short term, increase uncertainty in Ethereum’s technical roadmap execution. On the other hand, it also means talent is dispersing into a broader range of projects — Feist joining Tempo, former core developer Danny Ryan co-founding Etherealize, and other ex-foundation members continuing to play important roles in the Ethereum ecosystem.

Lessons for Crypto Organization Governance

The foundation’s difficulties are not unique. Many large protocols face similar governance challenges: how to balance decentralization ideals with market realities, how to create value for asset holders while maintaining technical neutrality. Whether Feist’s proposal is adopted or not, it will serve as an important case study for the industry.

Ongoing Technical Upgrades

Despite market pressure and personnel upheavals, Ethereum’s technical roadmap continues steadily. Upgrades like "Glamsterdam" and "Hegotá" scheduled for 2026 aim to further improve scalability and efficiency. Ethereum’s development remains highly decentralized; personnel changes at the foundation level do not equate to protocol development stagnation.

Conclusion

Dankrad Feist’s $1 billion proposal reflects a core contradiction facing the Ethereum ecosystem: whether a network committed to decentralization, censorship resistance, and technical purity needs a powerful organization closely aligned economically to drive value growth. If so, what form should this organization take?

The answer may not be clear in the short term. But what is certain is that Ethereum is undergoing a profound self-examination — about governance, economic incentives, and the boundaries between ideals and reality. The ultimate choice will not only shape Ethereum’s future but also provide a significant reference for governance in the broader crypto industry.