Vitalik on the Future of the Ethereum Foundation: Reducing ETH Sell-Offs and Streamlining Scale Contraction

Author: Vitalik Buterin, co-founder of Ethereum; Compiled by: Shaw, Golden Finance

Let me share some of my thoughts on the future direction of the Ethereum Foundation (EF).

First, I want to make it clear that what follows are only my personal views. The Foundation Board is not made up of only me, and I do not have any special authority that other board members do not. Most of this transition work is being driven by Aerugo, and I mainly participate in discussions on technical matters. The board is currently in an expansion phase, and my influence within the Foundation will keep shrinking over time—this is also the outcome I personally expect.

In 2025, the Ethereum Foundation’s execution capacity has seen numerous key improvements, and many lingering issues have been resolved. To this day, efficiency optimization and staying focused on goals continue to empower the Foundation’s development. After many difficult problems settled, earlier this year I noticed an increasingly prominent risk: from time to time, people raise doubts, saying that Vitalik repeatedly emphasizes that Ethereum should be decentralized, possess privacy properties, and become a technology with protective value, yet the Foundation’s actual actions have not matched this.

The information people receive may differ. Some have not perceived a crisis at all; instead, they think the institution is now paying more attention to execution and business expansion, and that all that is needed afterward is to move forward steadily, increase speed, and improve efficiency. As you can see, there are very real differences in how much we value critical voices and the degree of impact we feel from various critiques.

Let’s give an example from another domain.

When it comes to Google, there are two perspectives: on the one hand, Google integrates information worldwide, creating many valuable contributions for human society, and stands as a model of commercial success; on the other hand, Google started with idealism and an original intention, but later it was gradually eroded by mainstream commercial thinking, step by step abandoning the corporate creed of “Don’t be evil.”

My view of Google is somewhere between the two. But if we go back to 2008, and there were a button that could make Google’s adherence to its ideals one level stronger—say, granting Richard Stallman some core policy permanent veto power—I would press that button without hesitation.

The reason is that a single company’s choices are not the same as the direction of the entire industry, or even that of an entire country. The tech industry as a whole has gradually drifted away from its early ideals of doing good; chasing commercial interests, blindly pursuing faster progress in superintelligent technologies, letting self-interested opportunists infiltrate the industry, and having companies comply with—sometimes even proactively support—government demands related to control, surveillance, and military concerns.

In this environment, if a company goes against the tide, following Bernard Shaw’s “independent person” principle, staying true to its core values and moving upstream, it can better safeguard social freedom, power balance, and overall stability than every company simply following the mainstream. This is also part of the pluralistic philosophy I hold.

These thoughts are not unique to me, and they are not far from the original intent behind Aya and others’ formulation of the institution’s mission.

How does this way of thinking map onto the Ethereum Foundation’s positioning?

The Ethereum Foundation is not the core hub of the Ethereum ecosystem; it is only a node with a defined mission, operating in parallel with other actors. We have always maintained this positioning, but many members inside and outside the ecosystem hope the Foundation becomes the central core that controls everything. Now we are taking action to solidify our identity as an independent node.

This shift in positioning is especially critical. The Foundation’s resources and organizational scale are limited. The total amount of Ethereum tokens it holds is only about 0.16% of the entire network, even less than many individual holders. Meanwhile, the official foundation token share of most public chains commonly ranges from 10% to 50%.

From the perspective of the original intent, the Foundation’s initial scope of work was already defined in the token sale documents and pre-launch materials: the core was to develop on-chain programs and complete network iteration across versions. This work was fully completed in 2022. The Foundation was never meant to be a permanent custodian.

At this stage, the Foundation has decided to reallocate remaining resources, prioritizing long-term sustainability rather than blindly expanding its business footprint—and this also means the Foundation will reduce its ETH sell-offs. The work focus will be on safeguarding the critical matters that preserve Ethereum’s core traits: maintaining the network’s resistance to censorship and manipulation, and ensuring it remains open, with privacy that is safe and stable—while pushing into core areas that other stakeholders are unwilling or unable to get involved in.

This requires trade-offs. Some widely recognized projects and excellent practitioners will, going forward, develop independently of the Foundation. Even if team members have strong technical skills, good reputations, and highly aligned philosophies with the core principles, it is still necessary to spin off certain parts of the business to attract external capital and participation. At the same time, the Foundation will also establish a clear value stance.

All these adjustments will be carried out in coordination with various parties in the Ethereum ecosystem. Most actors in the ecosystem agree on the core value principles, but agreement does not equal exclusive deep investment in that field. For example, I support reducing animal cruelty and also prefer vegetarianism, but I would not become a purely vegetarianism-only adherent.

The Foundation is currently in a transitional phase, and we expect that over the coming months a new, stable long-term architecture will be finalized. The following will discuss the core principles of the new architecture from my personal technical perspective, while also acknowledging that the institution has many key non-technical considerations.

The core essence is this: Ethereum must have unique core competitiveness. Today, with AI developing at high speed, the pace of technological iteration is rapid. Relying only on the existing Ethereum Virtual Machine architecture, and adapting to short-term user needs each year through a small number of hard forks, is no longer competitive enough.

Some people argue that high performance means the absolute lowest latency and the ability to process millions of transactions per second. In my view, blindly chasing those kinds of metrics is not the right direction. If performance is improved but decentralization only edges ahead of peers by a small margin, the network will ultimately become mediocre—this path is hard to make work.

Ethereum does need scalability upgrades, but even more important is building absolute advantage in core value dimensions. We must break through by deeply focusing on the five core traits: resistance to censorship, resistance to manipulation, openness, privacy, and security. The specific directions are as follows:

• Achieving a provably bug-free network. Only half a year ago, an absolutely bug-free network was considered an impossible dream by network security researchers. Now, with AI-enabled formal verification techniques, this goal may be within reach. Ethereum should seize the technical first-mover advantage.

• A composite on-chain consensus mechanism. By combining a lightweight consensus architecture, Ethereum is currently the only public chain that has dual security properties: it has traditional Byzantine Fault Tolerance characteristics, able to withstand attacks from a high proportion of malicious nodes in asynchronous networks; and it also has Bitcoin-like proof-of-work characteristics, able to resist the highest 49% hash power attacks in synchronous network environments. Other public chains have only one of these features. I have always upheld this design baseline. Consortium chains and some mainstream public chains can rely on community consensus and hard forks to repair large-scale node failures, but Bitcoin, Ethereum, and zero-knowledge cryptography chains cannot adopt such a fallback approach.

• Maximally reducing intermediaries. At present, interactions such as smart contract wallets and privacy protocols all require the help of third-party relays to complete on-chain packaging. This not only creates shortcomings in user experience, but also hides security risks. The team is pushing technical R&D such as the FOCIL protocol and the EIP-8141 improvement proposal. By relying on open transaction pools to refine the packaging mechanism, we will reduce relay steps across the board, and make the system compatible with multiple encryption algorithms and privacy protocols. Meanwhile, on the client side, we are optimizing interaction logic to get rid of problems like wallets being unable to verify blocks and privacy data leaking arbitrarily, moving toward an ideal form that is compliant, secure, and trustworthy.

Some goals may seem not very realistic; even completing only half could keep the network running at a basic level—for example, by retaining relay institutions and flexibly switching service providers. But compromise solutions cannot shape an Ethereum with core barriers. That is why we aim for the best possible outcome.

Fortunately, these core goals do not conflict with high transaction processing efficiency. The team is also focusing on ledger scalability technologies. A well-designed Layer 2 network can further help development; customized Layer 2 solutions are especially effective for specific scenarios such as high-frequency transactions and privacy interactions. With erasure coding point-to-point transmission technology and various optimization approaches, there is also significant room to shorten block intervals.

From the standpoint of financial value, the most core asset on the Ethereum network is ETH. The total ETH asset value across the network reaches 250 billion US dollars. The technical upgrades mentioned above can directly empower the stability of ETH’s value.

My personal assets are close to 90% ETH. The remaining approximately 40 million US dollars in on-chain fiat assets has also all been planned for investment into open-source biotech and software and hardware R&D projects. Of course, some necessary work to maintain ETH’s value is not within the Foundation’s scope of responsibility. This requires other token-holding stakeholders in the ecosystem to help support it. Many institutions and individuals hold far more than the Foundation. The Foundation is also planning a collaboration model to provide early-stage support to such external stakeholders.

In the future, the Ethereum Foundation will be streamlined and contracted, with a clearer value stance. Some ideas may be hard for the general public to understand, but the institution’s lifespan will be longer, and it can continue to create unique value for the industry.