"The organization has decided to appoint Aya as the new chair of the Ethereum Foundation, let's give her a round of applause."

Author: Wenser

Original: Odaily

Cover: Photo by Jr Korpa on Unsplash

On February 27, the latest investigation results of the Bybit $150 million theft incident once again put Ethereum in the spotlight. According to the preliminary investigation, the problem mainly occurred in the Safe multi-signature wallet that Vitalik and the Ethereum Foundation (hereinafter referred to as EF) have repeatedly endorsed, and many people exclaimed "it turns out that the security infrastructure of the crypto industry is so fragile and amateurish".

On the other hand, on February 26, Ethereum co-founder Vitalik announced that EF's former executive director Aya Miyaguchi has been appointed as the new chair of EF, and highly praised her achievements during her 7-year tenure, including the stable execution of Ethereum hard forks, client interoperability workshops, Devcon, Ethereum's culture, and her unwavering commitment to its mission and values.

Looking at the two events together, the market reaction is mixed. For the former, the market is mostly incredulous, disappointed and fearful, after all, the assets related to the Safe multi-signature wallet exceed $100 billion, and the Bybit hacker simply chose the Bybit cold wallet with the largest ETH holdings. For the latter, some believe this move reflects Ethereum's continued commitment to decentralization, while others believe the Ethereum Foundation remains unchanged and is still bureaucratic.

Odaily has previously published several articles discussing the organizational reform of the EF (see "Vitalik Fires the First Shot of 'Reform', Where is the Ethereum Foundation Heading?", "Ethereum is 'Sick', Are These Three Remedies Effective?" and others), and we will discuss the latest news in this article, without providing any investment advice.

EF Reform Begins: Still a Centralized Decision-Making Process

EF's First Shot at Reform: "The Organization Has Decided to Appoint You as the Chairman"

As we mentioned in our previous article 《Ethereum is "Sick", Do These Three Remedies Address the Symptoms?》:

The chaos in management leads to chaos in the organization, and the chaos in the organization is the reason why the Ethereum Foundation cannot play a real leadership role to provide a coherent roadmap and a relatively clear direction of development for this ecosystem, but instead relies on the "individual centralized nodes" including Vitalik to "rack their brains" for Ethereum. This is not in line with the long-term development needs of the Ethereum ecosystem, nor can it support the innovative growth of the Ethereum ecosystem.

The key issue with the EF currently is that the decision-making at the organizational management level is made by centralized nodes. In the article 《Vitalik Fired the "First Shot" of Reform, Where is the Ethereum Foundation Heading?》, although Vitalik's proposed reform ideas for the EF "ruled out some wrong answers", the result shows that Aya Miyaguchi's position change is still driven by centralized decision-making, and the decision-maker is even herself - according to Vitalik's post, "A year ago, Aya first shared the idea of transitioning from Executive Director of @ethereumfndn to Chairman."

In this process, we did not find any public announcement from Vitalik or the EF organization about the job change process. The Ethereum community only received Aya's "acceptance speech-style" tweet after she took office as the EF Chairman, as well as a long blog post titled 《A New Chapter in the Infinite Garden》. While this seemingly freely growing crypto garden, the nutrient supply pipeline is firmly controlled by some EF personnel.

Previously, in response to the public opinion attacks on Aya by Ethereum community member and crypto KOL @coinmamba, Vitalik revealed that "The people who decided on the new EF (Ethereum Foundation) leadership team were me. One of the goals of the ongoing reforms is to provide the EF with a 'proper board of directors'. But until then, the decision-making power is with me."

On the one hand, this move did indeed transfer the focus of public opinion attacks from Aya to himself; but on the other hand, it also exposed the rigidity, stereotyping and "one-man rule" of the EF leadership changes, which are at odds with Vitalik's long-held "decentralization ideology".

This is also the most criticized aspect by the Ethereum community and crypto industry people: Vitalik, who is more adept at academic research and technical development, has actively or passively taken on the role of the spiritual leader and decision-maker of the ETH ecosystem, but in fact he is not good at community communication, marketing, and even product application.

This is also one of the important reasons why Vitalik's number of posts on the X platform in the past few months has even far exceeded the number of his previous external statements in the past 1-2 years: because he is unable to effectively communicate with the ETH community and the crypto circle based on market conditions, he can only unilaterally output his own views, emotions, and values, and even have to publish relevant Meme images at the request of the community.

If Vitalik were the CEO of a multi-billion dollar publicly traded company, from a personal level, what he has done is enough and "compromising" enough. But the reality is that he is not the CEO of a public company, but the co-founder of a crypto ecosystem, a token project, and a core figure in the EF organization.

So a better way to handle it is - "render unto God what is God's, and render unto Caesar what is Caesar's". Applying this to Ethereum and the EF, it would be: "Technology and research belong to Vitalik and EF researchers, education and public welfare belong to Aya and some EF organization members, and market, marketing, and community belong to appropriate ETH community members".

Somewhat outdated organizational philosophy: a Zen-like management style with idealism and romantic spirit

After discussing the "human" aspect, let's talk about the "management philosophy" at the EF organizational level.

Also in the article "A New Chapter in the Infinite Garden", Aya revealed her and EF's organizational philosophy:

• Ownership of Ethereum: It does not belong to any individual, so Ethereum belongs to everyone, and because of this, our permissionless culture not only tolerates differences, but will become stronger.
• EF's primary goal: To maintain Ethereum's cultural values, hoping to integrate Ethereum into the world architecture, rather than as a short-term corporate product, to ensure its resilience as an ecosystem;
• Ethereum's philosophical guidance: Ethereum's original intention is still the world computer, EF must help Ethereum maintain its potential infinity, and must keep it independent and free from various captures;
• EF's value embodiment: Open up a core developer dialogue platform, ensure diversity of node clients; support the development of interoperability workshops; promote the community development of account abstraction or cross-L2 coordination; adhere to the principle of "leading without control, coordinating without centralization" to complete the merger and transition from POW to POS mechanism; Devcon and DevConnet become independent and relevant community networks;

At the same time, she reiterated what Vitalik had emphasized before - EF's goal is not for EF to "win" (Odaily note: i.e. to win in terms of commercial value) - but for Ethereum to achieve long-term victory while adhering to its core values. Finally, she summarized EF's philosophical guiding principles as:

• Subtraction, not minimalism
• Long-term sustainability, not short-term gains
• Thoughtful complexity, not oversimplification
• Management, not control
• Adaptive growth, not rigid structures
• Purposeful evolution, not corporate-style expansion
• Community leadership, not domination

In addition, she mentioned that "the uniqueness of Ethereum lies in the resilience rooted in its values, which provides the possibility for technological and social innovation, and thus makes it a thriving infinite garden in the infinite game, rather than a machine; EF is committed to maintaining Ethereum's technological and social innovation to continue to serve the decentralized ideals and values of democracy under the human."

Finally, she expressed her expectation as the new EF chairperson - "My purpose is to continue to nurture Ethereum's unique culture and to be a voice bridging the gap between Ethereum and the broader global community. Just as in Pace Layering, cultural development is the slowest, but it provides a solid foundation for everything that follows ('If the slow parts don't occasionally frustrate us, they aren't doing their job - Stewart Brand'). Culture far exceeds market cycles, sustaining us through winters and propelling us through springs."

All the above statements are filled with idealism and romantic spirit of "naivety", as well as the Zen-like management style that Aya has emphasized many times before. And this is another kind of "cultural hegemony" - to define the culture of Ethereum in a one-sided way according to one's own principles and ideas.

In the early stage of the Ethereum ecosystem development, a more flexible, free, and decentralized organizational concept undoubtedly maximized the enthusiasm and innovative genes of the ecological network. Thus, Ethereum has experienced wave after wave of industry hype from 2018 to 2022, has laid the foundation for the "world computer" concept to become a reality, and has seen its price rise from the ICO price of $0.4 to the historical high of nearly $4,800.

But since 2022, with the successive collapse of UST, LUNA (Terra), 3AC, FTX and other events that have plunged the crypto industry into a winter, with the Bitcoin ecosystem taking over the crypto spotlight, and with the launch of Bitcoin spot ETFs in the US stock market, the times have changed, my friend.

An unacceptable but unavoidable reality is: the crypto industry has passed the early stage of scammers and idealists dancing together, and the influx of people from the old world to the new continent, and has entered a stage where the crypto economic system has become a part of the world economy (or even just a small part), BTC has become a slightly different investment target in the US financial industry, and the industry narrative has reached a dead end.

The much-dreamed-of Mass Adoption and the so-called positive externalities are nothing more than the wishful thinking of the crypto industry's arrogance and prejudice, just as Vitalik's disdain and contempt for the only unrefuted DeFi track in the crypto industry.

Decentralization is not just about talking, nor can it be achieved solely by the courage of a single person or organization; if a person or organization only blindly believes in the decentralization of technology, without being able to achieve decentralization on more levels, how can it win the trust of the people? How can it talk about values? How can it achieve the unity of knowledge and action?

At the same time, the recent Bybit theft of over 500,000 ETH has also exposed another hidden crisis in the Ethereum ecosystem: the crisis of decentralization.

The decentralization crisis of ETH: the Bybit theft case and the insecurity crisis of Safe

The decentralization of the ecosystem has always been the pride and constant boast of BTC Maxi and ETH Maxi. The former has created the world's largest "peer-to-peer payment system" digital gold, while the latter has been racing towards the vision of the "world computer" against Windows, MacOS and others.

But closely related to decentralization is the security risk brought by anonymity.

On the evening of February 27, Bybit co-founder and CEO Ben Zhou posted that the hacker forensics report provided by Sygnia and Verichains revealed that the stolen funds were due to a vulnerability in the Safe infrastructure, and that malicious code was deployed at UTC 15:29:25 on February 19, specifically targeting Bybit's Ethereum multi-signature cold wallet.

Previously, the multi-signature wallet platform Safe had claimed that the developer's machine was attacked, but the smart contract and front-end source code had no vulnerabilities; but the investigation results of the security companies showed that the truth was not as simple as that: the truth was supply chain poisoning, and the front-end js related to Safe was implanted with malicious code. In other words, Safe's infrastructure security had problems, leading to Bybit being targeted by the Lazarus Group hackers due to the large amount of ETH (over 400,000 ETH, far exceeding Bitfinex's cold wallet of 310,000 ETH, Vitalik's cold wallet of 240,000 ETH, and the Bandit hacker's 51,000 ETH) in its multi-signature cold wallet, and the theft of over 510,000 ETH and derivative assets.

As a long-standing crypto project with related assets worth up to $100 billion, Safe is mired in a crisis of trust over the "insecurity of security projects." It's worth noting that this is a multi-signature wallet platform used by Vitalik himself, who has endorsed it multiple times in the past. The Safe incident has also triggered another level of trust crisis: are the developers in the crypto industry actually insiders planted by hacker groups like the Lazarus Group?

While past security incidents have mostly been about technical vulnerabilities and gaps in risk management, the Bybit theft case and the security loophole in the Safe multi-signature wallet have exposed a "mutual non-attack dilemma" in the anonymous, decentralized world of the blockchain - we cannot be sure that there is no long-embedded Lazarus Group hacker member involved in the development, maintenance, and evolution of a crypto project (even a crypto security-related project).

Around 9 a.m. this morning, according to on-chain analyst Embermonitoring, the Bybit hacker has already washed away 206,000 of the 499,000 ETH stolen, at an average of 45,000 ETH per day, leaving 292,000 ETH (worth $685 million) in the hacker's address.

On one side, hackers who have stolen over $1.5 billion in assets are using various mixers and decentralized protocols to launder the stolen funds; on the other side, the EF is supporting the development of decentralization and privacy protocols.

On the afternoon of February 26, the EF announced that the foundation would donate $1.25 million for the legal defense of Tornado Cash developer Alexey Pertsev, stating that "privacy is normal, and writing code is not a crime."

It is worth mentioning that previously, BitMEX co-founder Arthur Hayes and DWF Labs partner Andrei Grachev had called out Vitalik on whether Ethereum would roll back the Bybit theft case as it did with The DAO hack. As of the time of writing, Vitalik himself and the EF have not made any comments, taking a seemingly detached stance. (Odaily note: Ethereum core developer Tim Beiko has previously responded personally to "Why can't Ethereum roll back the Bybit incident?", which also reveals the disconnect between the EF and the community)

Between decentralization and industry security management, Ethereum and the EF may be seeking a balance.

Epilogue: Confidence is more important than gold, where is Ethereum's confidence?

After a decade of Ethereum, in addition to the ancient whales and ICO profit-taking, it should also find new "confidence growth points." After all, confidence is often more important than gold, or even "digital gold."

The reality now is that the crypto community cannot find the confidence to support ETH's future development, only the EF's occasional market-making, its sluggish response to external changes, its one-sided pursuit of metaphysical ideas and values, and its evasion and indifference to the community's true voices and real concerns.

What will be the next event that brings new life to Ethereum? Who will it be? What project will it be?

Like the readers, I don't know either. The only thing we can do, besides waiting, is to quietly build in our own way.

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