With a preview of the 2022 and 2023 financial reports, Vitalik Buterin provided an update to elucidate the Ethereum Foundation’s (EF) spending practices.
The co-founder of Ethereum, Vitalik Buterin, used social media to address a flurry of rumors and discussion about the Ethereum Foundation’s (EF) spending policies.
Buterin’s intervention aimed to address this issue at an early stage as discussions about the EF’s allocation of its substantial resources became more heated.
In the thread, the foundation previewed the upcoming EF financial report covering 2022 and 2023, shedding light on internal and external expenditures.
Updates from @0xstark on EF spending.
— vitalik.eth (@VitalikButerin) August 27, 2024
The key info is in this chart.
The "new institutions" category basically means @NomicFoundation, @TheDRC_ , @l2beat, @0xPARC etc – no World Economic Forum insect protein research here!
More info has been and will be published; see thread. https://t.co/sWVfQQ5XQF pic.twitter.com/FY2EPT7Wiz
The Origins of the Controversy: Why Now?
For a while now, worries have been building regarding the Ethereum Foundation’s spending policies, especially as the cryptocurrency community becomes more and more watchful of the accountability and transparency of large institutions.
The EF, which is in charge of providing funding for R&D, various initiatives, and ecosystem support for Ethereum, has frequently been at the center of discussions about how it spends its sizeable financial resources.
After all, Buterin loves debates.
The foundation’s spending has drawn criticism for not being consistent with its stated goals of fostering innovation and decentralization within the Ethereum network.
After a number of community stakeholders questioned the EF’s financial reports’ transparency, the controversy grew more intense.
Concerns were raised that the funds might not be used effectively or in ways that would benefit the Ethereum ecosystem as a whole because the foundation, according to some, was not forthcoming with the details of its expenditures.
The idea that some spending categories, especially those designated as “new institutions,” lacked precise definitions or justifications served to fuel these criticisms even more.
Clarification on EF’s Spending: Buterin’s $140K Annually Salary
The foundation addressed the issue head-on on X (Twitter) in response to these growing concerns. It shared insights from an upcoming Ethereum Foundation report that detailed the organization’s spending for 2022 and 2023.
The report is scheduled to be released ahead of the big Ethereum conference, Devcon SEA, according to the thread. It will thoroughly explain how the foundation has allocated its resources.
A sneak peek at the spending data that showed the separation of internal and external expenses was provided with the comments.
The foundation explained that, in both years, about 38% of its expenditures went toward internal projects and the remaining 62% went toward grants from outside sources.
Funding from within goes toward supporting important teams on initiatives like Cryptography Research, Geth, Privacy & Scaling Explorations, and Solidity.
As per the thread, these teams function with a great degree of transparency, regularly providing the community with updates and progress.
The “new institutions” category in the spending report was one of the most closely examined sections.
The EF clarified that this category refers to grants from emerging organizations such as the Nomic Foundation, the Decentralization Research Centre, L2Beat, and the 0xPARC Foundation.
The EF was reportedly used to support entities closely aligned with Ethereum’s long-term vision, so they humorously refuted rumors that it was funding unrelated initiatives, like “World Economic Forum insect protein research.”
But really? Inspect protein research?
The comments also touched on the larger goal of the Ethereum Foundation; the thread clarified that the strategy of the foundation entails investing in the future by supporting new institutions that can continue the legacy of decentralization, as well as funding immediate research and development needs.
The community will be able to better understand how funds are being allocated to further Ethereum’s goals with the release of the upcoming report, which is anticipated to offer even more thorough insights into the foundation’s financial procedures.
Notably, a passerby on Buterin’s tweet asked;
“What about Mr Vitalik’s salary?” He asked curiously.
What about Mr Vitalik’s salary?
— Dark Crypto Larp 🃏 (@DarkCryptoLord) August 27, 2024
182,000 SGD per year. That’s approximately close to $140k US Dollars.
Is the co-founder of Ethereum really paid that much? With any luck, the report will provide more details.