The latest Ethereum funding crisis has sparked intense debate, focusing on whether staking rewards should be taxed.

ME News report, June 24 (UTC+8), Ethereum is currently embroiled in a heated governance debate over the sources of funding for core development. Last Friday, former Ethereum Foundation contributor Trenton Van Epps warned that, as existing support programs run out and the Foundation reduces spending, the core development ecosystem could face a “slow-burning funding crisis” within three to nine months, requiring approximately $30 million per year to sustain more than ten client, research, and coordination teams. The controversy stems from a proposal put forward by Clément Lesaege, co-founder of Kleros, titled “Validator Redirected Income,” which suggests redirecting 0% to 10% of validator rewards into an ecosystem funding pool, estimated to generate about 50,000 to 70,000 ETH annually based on current staking levels. The proposal has met with widespread opposition, with critics warning that it could entrench the power of large validators and blur operational and governance boundaries.

Some community members had previously rebutted that Foundation funds are sufficient to operate for 30 years; however, the Foundation’s actual decision-making shows it is proactively cutting costs and pushing for diversification of funding models. This Monday, EthLabs, a nonprofit organization launched by five former Ethereum Foundation researchers, announced its establishment, aiming to directly fund development through large ETH holders. On Tuesday, Ethereum founder Vitalik Buterin said the Foundation is cutting its budget by about 40% in line with existing policies, and recently laid off 54 staff members. (Source: ChainCatcher)