Ethereum Price Outlook: Imminent Funding Crisis Could Put Ethereum at Risk

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Ethereum developers may face a “slow-burning funding crisis” in the coming months following the depletion of the Ethereum Foundation (EF) treasury and the end of the Customer Incentive Program (CIP), according to Trent Van Epps, a former contributor to the Ethereum Foundation.

In a post on X on Thursday, Van Epps, who coordinated core development and funding for Ethereum developers through the Protocol Guild from May 2021 to April 2026, said that $30 million per year is needed to maintain Ethereum’s ability to design and launch “industry-leading” features through its broad customer base and its research and coordination team.

Van Epps wrote: “Compared with the shared resources produced by this funding today, and the project’s long-term ambition, this is a very small cost.”

However, the absence of a strategic plan to continuously raise and allocate funding could destroy that capability.

Van Epps noted that funding has already begun to run out after the Ethereum Fund’s decision to gradually cut annual spending from 15% to around 5% by 2030, after most of its resources had been exhausted to support the Ethereum ecosystem over the past decade. He also pointed out that the Customer Incentive Program (CIP), a four-year program that funded customer teams with storage-based rewards, ended in April, and that “it doesn’t seem like there’s an alternative coming.”

The post said that the lack of ongoing funding could lead to the loss of expert talent, slower progress in addressing and scaling quantum computing challenges, and ultimately damage the reputation of the main network. It added that contributors may move to other projects or be psychologically affected by this issue.

“I believe we underestimate the risks of this investment shortfall in continuity of stewardship. When symptoms show up within 12 to 18 months, it will be very difficult and extremely costly to repair the damage,” Van Epps said. “No matter your view on what the protocol will look like in 5 or 10 years (and continuity after that), there is a risk that it becomes an unfunded commitment. We shouldn’t accept this ambiguity.”

The post also highlighted the Ethereum Foundation (EF) drive to reduce its role, noting that it plans to gradually diminish its importance in managing the Ethereum ecosystem. Van Epps identified key factors that stakeholders in the ecosystem need to discuss as new organizations may take on some of the Ethereum Foundation’s responsibilities. These factors include: “recognizing and effectively managing every resource of the interconnected network: software (EVM/clients), the network (Ethereum), and assets (ETH), [...] scalable, accountable, and neutral funding mechanisms [...] and pursuing broad-based adoption and celebrating it as an essential member: we should aim to create strong network resources for the broadest possible range of public beneficiaries.”

This post coincides with the announcement of the departure of Co-Executive Director Xiao-Wei Wang from the Ethereum Foundation. This move follows a series of resignations by senior executives and prominent developers from the foundation in recent months.
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