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Ethereum’s latest funding crisis has sparked heated debate, with the focus on whether staking rewards should be taxed.

MarsBitNews
Mars Finance News, according to Cointelegraph reports, Ethereum is embroiled in a heated governance debate over the sources of core development funding. Last Friday, former Ethereum Foundation contributor Trenton Van Epps warned that as old support programs deplete and Foundation expenses decrease, the core development ecosystem could face a "slow-burning funding crisis" within three to nine months, requiring about $30 million annually to sustain more than ten client, research, and coordination teams. The debate centers on a proposal by Clément Lesaege, co-founder of Kleros, suggesting the redirection of 0% to 10% of validator rewards to an ecosystem fund pool, which, based on current staking levels, could generate approximately 50k to 70k ETH per year. The proposal has been widely opposed, with critics warning it could entrench the power of large validators and blur operational and governance boundaries. Some community members previously countered that Foundation funds are sufficient to operate for 30 years, but actual Foundation decisions indicate it is actively reducing expenses and promoting diversified funding models. On Monday, EthLabs, a nonprofit organization initiated by five former Ethereum Foundation researchers, announced its establishment to fund development directly through large ETH holders. On Tuesday, Ethereum founder Vitalik Buterin stated that the Foundation is cutting about 40% of its budget according to established policies, and has recently laid off 54 staff members.
ETH-1.18%
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