Vitalik Buterin has pushed back against growing criticism of the Ethereum Foundation, arguing that the organization should not act as the center of the Ethereum ecosystem or focus on boosting ETH price performance.
In a detailed response posted on X, Buterin said the Ethereum Foundation was designed to function as one participant within a decentralized ecosystem rather than a central authority controlling Ethereum’s direction.
His comments come as parts of the Ethereum community demand stronger leadership from the foundation, especially as ETH struggles against rival blockchains and criticism over tokenomics continues to grow.
Ethereum Foundation Defends Long Term Strategy
Buterin explained that the Ethereum Foundation intends to remain focused on long-term research, cybersecurity, decentralization, and open-source development instead of short-term market performance.
He also highlighted the foundation’s relatively small ETH holdings. According to Buterin, the Ethereum Foundation controls only around 0.16% of Ethereum’s circulating supply, far below the 10% to 50% treasury allocations commonly seen in other crypto ecosystems.
The Ethereum co-founder said this was intentional and reflects the foundation’s philosophy rather than poor planning.
At the same time, Buterin confirmed that the foundation plans to reduce ETH sales in the future and focus on extending the lifespan of its treasury to continue funding ecosystem research.
In May, the Ethereum Foundation withdrew 21,270 ETH from staking on Lido. While the move stopped the assets from generating staking yield, it did not necessarily signal plans to sell the tokens.
Pressure on Ethereum Continues to Build
The debate comes during a difficult period for Ethereum. Several large ETH holders have exited positions in recent months, while multiple well-known employees have also left the Ethereum Foundation.
Particular criticism has centered around the Dencun upgrade released in March 2024. The update significantly lowered Layer 2 transaction fees but also reduced revenue generated on Ethereum’s base layer.
Some analysts believe the decision highlighted Ethereum’s willingness to prioritize scaling and ecosystem growth over tokenomics concerns tied to ETH itself.
Despite the backlash, the Ethereum Foundation does not appear willing to shift its priorities toward competing directly with high-performance blockchains focused on transaction speed and aggressive growth strategies.
Instead, Buterin reiterated that Ethereum’s long-term priorities remain security, decentralization, and protocol resilience.
Why Ethereum’s Debate Looks Different From Traditional Tech Foundations
Historically, the Ethereum Foundation’s approach resembles the structure used by several major open-source organizations.
The Linux Foundation does not manage businesses built on Linux or attempt to influence company valuations. Similarly, the Mozilla Foundation does not actively support the market performance of projects connected to its ecosystem.
The difference with Ethereum is that ETH serves both as the network’s utility asset and a highly speculative financial instrument. That dual role creates constant pressure on the foundation to support price performance even while it positions itself primarily as a research organization.
Notably, the Ethereum Foundation previously explored treasury strategies that avoided direct token sales. Earlier reports showed the organization depositing ETH into protocols such as Aave and Compound to generate yield instead of liquidating assets.
The recent withdrawal from Lido staking appears to follow the same long-term treasury management strategy rather than signaling a major policy reversal.
