Vitalik discusses the future of the Ethereum Foundation: reducing ETH sell-offs and streamlining scale contraction

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

Sharing some of my thoughts on the future development direction of the Ethereum Foundation (EF).

First, I declare that the following are only personal opinions. The Foundation Council is not composed of only me, and I do not possess special privileges that other council members do not have. Most of this transition work is being driven by Aerugo, with my main involvement in technical discussions. Currently, the council is in the process of expanding, and my influence within the Foundation will continue to diminish, which is also the outcome I personally expect.

By 2025, the Ethereum Foundation’s operational capacity will be significantly enhanced, and many legacy issues will be resolved. To this day, efficiency optimization and goal focus remain key to empowering the Foundation’s development. After many problems are settled, earlier this year I noticed an increasingly prominent hidden risk: There are often questions raised, and Vitalik repeatedly emphasizes that Ethereum should achieve decentralization and privacy attributes, becoming a technology with protective value, yet the Foundation’s actual actions have not aligned with this.

The information received by everyone may vary; some do not perceive the crisis and instead believe that the organization is now beginning to focus on implementation and business expansion, and that future steps only need steady progress and increased efficiency. This shows that there are real differences in how we value critical voices and how much impact various criticisms have.

Let’s illustrate with an example from another field.

There are two perspectives on Google: On one hand, Google consolidates global information, creating immense value for human society, and is a model of business success; on the other hand, Google started with ideals and aspirations, but over time has been gradually eroded by mainstream commercial thinking, gradually abandoning the corporate credo of “don’t be evil.”

My view of Google falls somewhere in between. But if we go back to 2008, and there was a button that could elevate Google’s commitment to its ideals—say, granting Richard Stallman some permanent veto power over core policies—I would press that button without hesitation.

The reason is that decisions made by a single company are not equivalent to the direction of the entire industry or even a country. The tech industry as a whole has gradually diverged from its early good-will ideals, chasing commercial interests, blindly pursuing rapid growth of superintelligent technologies, with opportunists infiltrating the industry, and companies being pressured or even actively cooperating with government demands related to control, surveillance, and military interests.

In this environment, if a company dares to go against the trend, adhering to the principles of “the independent individual” as described by Bernard Shaw, staying true to its original intent and going against the flow, it can better safeguard social freedom, power balance, and overall stability than all the companies following the herd. This is also part of my belief in diversity of ideas.

Such thinking is not unique to me; it is also quite aligned with the original mission set by Aya and others when establishing the organization.

How does this thinking translate into the positioning of the Ethereum Foundation?

The Ethereum Foundation is not the core hub of the Ethereum ecosystem, but rather a node with a defined mission, operating alongside other entities. We have always maintained this positioning, but many members inside and outside the ecosystem hope that the Foundation will become the controlling core. Now we are taking steps to solidify our independent node status.

This shift in positioning is especially critical. The Foundation’s resources and organizational scale are limited; the total amount of ETH it holds is only about 0.16% of the entire network, even less than many individual holders; most public chain official foundations hold tokens ranging from 10% to 50%.

From the original purpose, the Foundation’s initial scope of work was defined in the token sale documents and pre-launch materials, primarily to develop on-chain programs and complete network upgrades across versions. This mission was fully completed by 2022, and the Foundation was never meant to be a permanent custodian.

At this stage, the Foundation has decided to allocate remaining resources primarily to ensure long-term sustainability rather than blindly expanding its business scope, which also means reducing ETH sales. The focus will be on safeguarding the core features of Ethereum—maintaining the network’s resistance to censorship, manipulation, ensuring openness, privacy, and security—while venturing into areas that other entities are reluctant or unable to explore.

This requires us to make trade-offs: some widely recognized projects and excellent practitioners will subsequently operate independently of the Foundation. Even if the team members are technically excellent, have good reputations, and share the core principles, divesting from certain activities is necessary to attract external capital to support related development. Meanwhile, the Foundation will also establish a clear stance on its values.

All these adjustments will be carried out in coordination with various parties within the Ethereum ecosystem. Most stakeholders recognize the core values, but recognition does not mean exclusive focus on that field. For example, I support reducing animal cruelty and prefer vegetarianism, but I wouldn’t become a strict vegetarian.

The Foundation is still in a transitional phase, and in the coming months, a new, long-term stable architecture is expected to be finalized. Below, I will share from my personal technical perspective the core principles of this new architecture, while acknowledging that the organization also faces many key non-technical considerations.

The core idea: Ethereum must develop a unique core competitive advantage. Currently, with rapid advances in artificial intelligence and various technological iterations, relying solely on the existing Ethereum Virtual Machine (EVM) architecture and making minor hard forks annually to meet short-term user needs is no longer competitive.

Some believe that high performance means ultra-low latency and millions of transactions per second. In my view, blindly pursuing such metrics is not the right direction. If performance is simply improved, but decentralization is only marginally better than peers, the network will ultimately become mediocre—this path is hard to sustain.

Ethereum indeed needs scalability upgrades, but more importantly, it must establish an absolute advantage in core values—focusing on breakthroughs in resistance to censorship, manipulation, openness, privacy, and security. The specific directions include:

• Achieving a provably bug-free network. Just half a year ago, a completely bug-free network was considered a fantasy by cybersecurity researchers. Today, with AI-based formal verification techniques, this goal is within reach, and Ethereum should seize the technological opportunity.

• Hybrid on-chain consensus mechanisms. Combining lightweight consensus architectures, Ethereum is currently the only public chain with dual security features: it has traditional Byzantine Fault Tolerance (BFT) properties, capable of withstanding high proportions of malicious nodes in asynchronous networks; it also has Bitcoin-like proof-of-work (PoW) characteristics, capable of resisting up to 49% hash power attacks in synchronous environments. Other public chains only possess one of these features. I have always maintained 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 public chains cannot adopt such fallback methods.

• Maximally reducing middlemen. Currently, interactions such as smart contract wallets and privacy protocols require third-party relays to complete on-chain packaging, which not only hampers user experience but also introduces security risks. The team is advancing technical research on protocols like FOCIL and proposals like EIP-8141, improving packaging mechanisms through open transaction pools, reducing relay steps across the board, and supporting multiple encryption algorithms and privacy protocols. At the client level, interaction logic is also being optimized to eliminate issues like wallets unable to verify blocks or privacy data leaking, moving toward a compliant, secure, and trustworthy ideal.

Some goals may seem unrealistic; even achieving half of them could sustain the network’s basic operation—such as retaining relay agencies or flexibly switching service providers. But compromise solutions cannot create an Ethereum with core barriers. Therefore, we strive for excellence.

Fortunately, these core goals do not conflict with high transaction throughput. The team is also focusing on ledger scalability technologies. Well-designed Layer 2 solutions can significantly aid development, especially for high-frequency trading and privacy-focused scenarios, with customized Layer 2 schemes. Using erasure coding, peer-to-peer transmission, and various optimizations, block intervals can be greatly shortened.

From a financial value perspective, the most critical asset of the Ethereum network is ETH, with a total value of around $250 billion. The technological upgrades mentioned above will effectively support the stability of ETH’s value.

My personal assets are about 90% ETH, with the remaining roughly $40 million in on-chain fiat assets, all planned to be invested in open-source biotech and hardware/software R&D projects. Of course, maintaining ETH’s value involves some necessary work that is beyond the Foundation’s responsibilities. This requires other token-holding entities within the ecosystem to help support; many institutions and individuals hold far more tokens than the Foundation. The Foundation is also planning cooperation models to provide initial support for such external entities.

The future Ethereum Foundation will be leaner, with a clearer stance on values. Some ideas may be hard for the public to understand, but the organization’s longevity will be longer, and it can continue to create unique value for the industry.