Author: Kaori & Penny
On January 21, Eric Conner, a well-known core developer of Ethereum, posted on social media to announce his departure from the Ethereum Foundation, citing a series of issues such as lack of transparency, disconnect from the community, and resistance to change within the Ethereum Foundation.
The criticism of the Ethereum Foundation (EF) has been ongoing, and the recent sluggish performance of Ethereum has further fueled the dissatisfaction within the community. Many renowned investors and developers have expressed their opinions and discontent with the EF, but the departure of a veteran developer like Eric Conner suggests that the internal divisions within the EF have reached an irreconcilable point, pushing the EF to the forefront of the controversy.
As the public discourse continues to escalate, and the community's anger has not yet subsided, a grassroots "Second Foundation" has quietly been established.
Ethereum is facing both internal and external challenges, and urgent reforms are needed.
Who is Eric?
Eric Conner, a well-known core developer of Ethereum, has left the ecosystem community after nearly 11 years of collaboration, citing Vitalik's rejection of the leadership restructuring proposal as the reason.
Eric is a co-author of EIP-1559, a significant network change that alters the way Ethereum transaction fees operate. He was not formally employed by Ethereum, but he has been providing consulting, investing, and has been one of the leaders guiding the ecosystem's development since its early days.
On January 21, Ethereum core developer Eric Conner posted on a social platform, saying, "I am no longer '.eth'. Perhaps one day, the people in leadership roles will realign with the community, but for now, I'm out. Deep down, I truly hope Ethereum succeeds. Good luck."
Subsequently, he also posted about why he entered Ethereum and why he chose to leave. Eric first encountered Bitcoin in 2012 and witnessed many of his friends suffer heavy losses due to their reliance on centralized exchanges after the Mt. Gox incident. Eric and some friends tried to develop the first decentralized exchange (DEX) on Ethereum - EtherEx, and although the project did not succeed due to poor timing, it allowed him to become immersed in the Ethereum community.
Previously, Eric had stated that the Ethereum Foundation (EF) is becoming increasingly opaque and disconnected from the community. The Foundation could have reduced its budget by 80%, and Ethereum would still function and develop normally. The problem is that the current Foundation does not report to stakeholders, is gradually sinking into a quagmire, and is resisting change. The Foundation is now exhibiting an "anti-victory and competitive mentality," causing many community members to question whether they should stay.
The Discontent Has Been Brewing for a While
Since last year's EDCON in Montenegro, the industry's dissatisfaction with the Ethereum Foundation has begun to surface. Layer 2 (L2), as a solution to improve Ethereum's scalability, has been shackled with the "Ethereum-aligned" constraint from day one, accepting and executing the Foundation's will. Everyone is pledging loyalty to Ethereum, aiming to be the most EVM-compatible L2, which has made project teams more concerned with gaining the EF's approval than the product and technology itself, causing the Ethereum ecosystem to become distorted under the pressure of the EF.
The EF's complex web of vested interests, its ideological "orthodoxy" constraints on projects, and the fact that major protocols are gradually fleeing Ethereum while still being backstabbed, suggest that the organization is entering a midlife crisis, facing challenges in its structure, efficiency, and culture. With the resurgence of Solana driven by the meme craze, Ethereum's weak performance during the recent Bitcoin all-time high breakthroughs, and the recent Trump's token launch on Solana driving SOL to new highs, the decline of Ethereum has become increasingly apparent, further fueling the community's discontent with Ethereum. Under public pressure, on the 18th, Vitalik himself published a post responding to the criticism, explaining that a major restructuring of the EF's leadership is underway, as well as the specific goals of the reform.
This has sparked a wave of criticism of the EF.
On the 20th, Kain Warwick, the founder of Synthetix and Infinex, first posted that he was dissatisfied with Layer 2 (L2): "If I were to run the EF, I would definitely put pressure on Layer 2 to use their sequencer revenue to burn ETH. Ethereum has a lot of leverage in this negotiation..." At the same time, Aave founder Stani Kulechov also stated that after reading the Ethereum 2024 budget report, he believes there are 12 areas that can be improved to ensure the sustainable development of the EF, including slowing the burn rate, reducing the number of employees, and establishing a sustainable revenue model. However, on the 21st, Stani Kulechov posted again, saying: "I don't advocate for the dissolution of the EF, but for a better, faster, stronger, and more comprehensive EF path...... We should focus less on internal politics or neutrality, and more on accelerating technological progress."
That evening, Evgeny Gaevoy, the founder and CEO of the top-tier market maker Wintermute, also posted his views on Ethereum, mentioning that Ethereum currently risks falling into a "death spiral": "If there are no casinos, the entire use of ETH is to send things in Zazulu, then the price will be very low, and the security will also be very low. As the ETH price falls, fewer and fewer dapps will consider it secure and will flee to other chains, which could create a very (death) spiral, further lowering the price."
Faced with the community's sudden onslaught, the EF clearly did not have a comprehensive strategy to appease the public anger, and even went against the tide, responding to the community's staking proposal by proposing to sell ETH. The next day, Vitalik announced an update on the Ethereum Foundation's finances, stating that the Ethereum Foundation has established a new 3-of-5 multi-signature wallet, and the EF will use this new wallet to participate in the DeFi ecosystem, and has already conducted test transactions on Aave.
However, the community does not seem to be convinced, mocking it as "are they preparing to sell again?" This EF criticism battle, with the community's anger still not appeased, the smoke of war still lingering.
A Second Foundation Has Emerged, Which Way to Go?
On January 22, market rumors surfaced that Lido founder Konstantin Lomashuk has established the Ethereum Second Foundation (Second Foundation). The official Twitter account (@2nd_foundation_) of the Second Foundation has already gone online, and Konstantin Lomashuk has also promptly retweeted its first tweet.
On January 23, Lido founder Konstantin Lomashuk posted again, stating that the previous tweet was just an idea, and there is currently no actual establishment of a "Second Foundation".
He stated that Ethereum is the ultimate world computer, and every member of the Ethereum community can contribute to its growth, development, and success. If a Second Foundation is established in the future, it must have a clear goal to complement the great work done by the current contributors. "Thank you all for your support, and I also believe Ethereum needs more organizations to work together to drive its development. I will share more thoughts after further communication with those who have contacted me."
Although this plan has not yet been implemented, combined with Eric Conner's departure, the community has engaged in a heated debate about the internal and external challenges facing Ethereum's development.
Regardless of the heated debates in the domestic and foreign communities, there is a consensus that the Ethereum Foundation needs to make a choice, because the left and right divisions exist naturally, and it is impossible for one person to be both a leftist and a rightist. When the industry is in difficulty, it needs the idealism of the left, and when the industry is developing, it needs the accelerationism of the right. A netizen commented that "if Ethereum takes the path of network nation-building, political diversity will inevitably exist. If multiple foundations can confront and cooperate with each other, it will guide Ethereum towards a greater future."
Second Foundation currently appears to be a troublemaker, but some people also say, why not expect a few more decentralized control departments to manage power, just as Vitalik said in an article on January 21 that the future of the Ethereum blockchain is decentralized, and the Ethereum Foundation is only a part of it. He further pointed out: "EF should not 'over-intervene', it should confidently represent the part of Ethereum that it can effectively represent, while consciously creating and cultivating open spaces for other organizations to represent other aspects of Ethereum. Some of these aspects may even be more suitable to exist in a profit-oriented form."
