An overview of the Ethereum Foundation’s 2024 report: how much money was spent and where was it spent?

What is the Ethereum Foundation?

The Ethereum Foundation (EF) is a non-profit organization that supports the Ethereum ecosystem, which is a community composed of organizations, individuals, and companies that provide funding for protocol development, community growth, and Ethereum advocacy.

The EF is at the forefront of a new type of organization: supporting the blockchain ecosystem without controlling it. This means that the EF is constantly thinking about what kind of organization it needs to become to support the long-term development of Ethereum.

The EF itself is composed of many separate teams, and it believes that small, autonomous teams are the most effective structure for getting work done. New teams are often spun off from existing ones to organically grow in response to new needs in the ecosystem.

The EF teams contribute to many different parts of the Ethereum ecosystem. Some teams build software or explore the frontiers of the Ethereum roadmap; some help nurture the developer and user communities around the world; others help evangelize the utility and potential of Ethereum to the world.

Core Values

Over the past 10 years, the EF has experienced the ups and downs of Ethereum's brief history.

This experience has taught us many lessons. Over time, three important ideas have emerged that help guide the EF and inform our decision-making.

These are our three core values: long-term thinking, subtraction, and value management.

Long-term Thinking

Ethereum is still a young ecosystem, and it can sometimes be tempted to focus on very short-term goals and cycles. The EF should balance this tendency: looking beyond the peaks and valleys of market cycles, and focusing on the long-term horizon. This means the EF is willing to take actions today that may not pay off for years or even decades, or may never pay off at all.

Subtraction

Subtraction means that we do not try to accumulate power and prestige. Our success is measured by the achievements of the Ethereum ecosystem, not the EF's own accomplishments. We are happy to give credit to others, support independent organizations, and work quietly in the background.

Subtraction stems from an observation: organizations - non-profits - naturally tend to want to accumulate power. But this cannot happen in an organization like the EF that is meant to support a decentralized blockchain; to counteract this default path, the EF must actively take measures of subtraction.

Value Management

Ethereum is not just a technology. It is a community bound by a set of shared values, with a vision of how those values can improve the world. The Ethereum ecosystem stands on the shoulders of the long history of the open-source and cypherpunk communities, and they have paved the way for us.

EF Activities and Expenditures

Ethereum Foundation Team

The EF contains many teams that contribute to the Ethereum ecosystem, spanning a wide range of areas. Most teams contribute to critical Ethereum infrastructure, while a smaller number research and manage the Ethereum roadmap, or help coordinate the ecosystem. Examples of teams include: 'Odaily' must be translated into 'Odaily'. 'mainnet' must be translated into 'mainnet'. 'Block' must be translated into 'Block'. 'Solidity' must be translated into 'Solidity'. 'ROA' must be translated into 'ROA'. 'TRON' must be translated into 'TRON'. 'Dai' must be translated into 'Dai'. 'Amp' must be translated into 'Amp'. 'NKN' must be translated into 'NKN'. 'Gitcoin' must be translated into 'Gitcoin'. 'ETH' must be translated into 'ETH'. 'SOL' must be translated into 'SOL'. 'HT' must be translated into 'HT'. 'OP' must be translated into 'OP'. 'AR' must be translated into 'AR'. 'ONT' must be translated into 'ONT'. 'AMP' must be translated into 'AMP'. 'PLA' must be translated into 'PLA'. 'RON' must be translated into 'RON'. 'ONG' must be translated into 'ONG'.

• Robust Incentives Group (RIG): Dedicated to Ethereum mechanism design and cryptoeconomics research. RIG's work maps out all the ways in which incentive measures directly or indirectly impact Ethereum users and protocol stakeholders. Where possible, RIG proposes mechanisms to restore incentive compatibility and system optimality.
• Protocol Support Team: The Protocol Support Team ensures Ethereum has the right people, processes, and perspectives to support its long-term stewardship. In practice, the team helps facilitate network upgrades (AllCoreDevs, EL Specs), attract and retain protocol contributors (Ethereum Protocol Fellowships), and take on various other projects related to Ethereum's sustainability.
• Devcon: Hosts and supports events like Devcon to foster collaboration, education, and to promote Ethereum's values and mission. As the community has grown, the team has expanded Ethereum's global reach through community-driven Devconnect gatherings, support for non-EF events globally, and the Road to Devcon grant program.

Ethereum Foundation Grants

The EF supports critical work across the ecosystem through grants. Grants come in various sizes and forms, with many EF teams playing a role in approving and evaluating grants. The Ecosystem Support Program (ESP) regularly reports on grant activities. Grant examples:

• WTF Academy: WTF Academy produces free, open-source, concise, and community-reviewed Web3 development tutorials, including on Solidity, Ethers, etc., with a focus on Chinese content. ESP's grant helped them expand the curriculum and translate more content to English. $30,000 grant awarded in November 2022.
• Security Alliance: The Security Alliance is dedicated to building a safer ecosystem. They do this through initiatives like Seal Team 911, the White Hat Security Harbor Protocol, their security framework, and Seal Team Wargames. Their efforts help projects and users through proactive security measures, incident response, and preventing fund loss. $130,000 granted over 2022-2023.
• Road to Devcon University Tour: An event held at five universities in Thailand, aiming to expose students to the Ethereum ecosystem, educate them on Ethereum, and provide them with employment opportunities. $10,000 grant awarded in April 2024.

A Thriving Ethereum Institutional Ecosystem

Ethereum is a massive global project. There is an incredible scope and diversity of work happening at all levels of the Ethereum ecosystem and around the world.

Today, many individuals and organizations contribute to this work, but there is still much to be done, especially in supporting and maintaining public goods. Relying on one or a few organizations to do the majority of the work poses risks to the ecosystem.

This has led the EF to prioritize developing many independent organizations that can strengthen and support the ecosystem, allowing the responsibility for Ethereum's health, maintenance, and advancement to be shared.

Over the past two years, the EF has worked to incubate and support many new organizations driving Ethereum's ecosystem forward, such as Argot Collective, Geodework, L2BEAT, Nomic Foundation, and 0xPARC. We are proud to work alongside them.

• Argot Collective: Argot Collective is a newly formed non-profit, democratic organization dedicated to preserving the freedom and independence of Ethereum software. Argot is composed of around 25 former Ethereum Foundation team members, including compiler engineers, programming language theorists, and verification experts, focused on core infrastructure development without commercial pressures. Their mission emphasizes long-term sustainability and transparency, rejecting profit-driven motives. Argot is the new home for the current Ethereum Foundation internal teams working on Solidity, Fe, Formal Verification, and Sourcify. While Argot expects to eventually retire and launch new projects, they will remain fully committed to the long-term maintenance and development of Solidity as long as the community finds it useful (Argot.org).
• Geodework: Geodework is a non-profit organization dedicated to the development of the Ethereum ecosystem and the construction of a better internet. Its core focus is the pursuit of Ethereum's geographic decentralization, which means building community and educational infrastructure and supporting local innovators and leaders around the world. In practice, Geodework facilitates funding, creates ecosystem tools, products and services, and executes a series of initiatives aimed at strengthening the Ethereum community layer. Geodework is currently being incubated within the EF and will share more information in early 2025.
• L2BEAT: L2BEAT provides analysis, research, and tools related to Ethereum Layer 2 scaling projects. It was created to provide transparent and verifiable insights into the emerging Layer 2 technologies aiming to scale Ethereum, and to monitor the different Layer 2 technologies, primarily focusing on the security of user funds. L2BEAT tracks the progress of projects committed to becoming trust-minimized L2s. Their goal is to provide the community with up-to-date information on the status of these projects and to provide them with insights and guidance to achieve full trust minimization.
• Nomic Foundation: The Nomic Foundation is an early-stage non-profit organization providing open-source engineering software, dedicated to advancing the Ethereum ecosystem. Their ultimate goal is to ensure Ethereum continues to provide a high-quality, reliable developer experience, and in doing so, help Ethereum and the broader decentralization movement reach their full potential, creating a world with more autonomy and choice for millions (Economic Basis).
• 0xPARC: 0xPARC accelerates the development and deployment of programmable cryptography. They operate, fund, and support teams working across the full stack. This includes research into zero-knowledge cryptography, multi-party computation, homomorphic encryption, program obfuscation, and deploying these technologies into autonomous world, identity, and other user-facing applications.

EF Spending in 2022

EF Spending in 2023

Spending Category Explanations

• L1 R&D: This category includes all R&D related to mainnet upgrades, Geth, internal security research, cryptography R&D, economic modeling and mechanism design, as well as long-term research to realize the Ethereum community roadmap, and grants to external execution and consensus layer client teams. It also includes many other grant projects to external teams, such as network stress testing and external cryptography research.
• L2 R&D: Includes support for internal teams contributing to L2 research and development, as well as grants to external entities to improve the L2 ecosystem. These grant projects cover educational resources, block explorers, developer tools, security audits, and more.
• ZK R&D: Includes funding for the Privacy & Scaling Exploration team, whose projects include MACI, Anon Aadhaar, TLS Notary, and more. Additionally, it provides various grants, from ZK development tools, ZK ceremony UX, to ZK application proofs of concept.
• Developer Platform: Covers all work related to enhancing Ethereum as a developer platform, including projects for development libraries like Solidity, Remix, Ethers.js, and Web3.js, as well as support for the Python ecosystem.
• Community Development: Includes various work supporting different parts of the Ethereum community, covering interactions with the core protocol community (such as supporting the staking community), the Next Billion team, Devcon and Devconnect events, Ethereum.org and other educational resources. Additionally, it provides grants to local and regional Ethereum communities and events globally.
• Internal Operations: Covers general expenses supporting all EF teams, including all costs related to internal and external legal, accounting, and financial services, as well as organization-wide subscriptions and service providers, such as data services, operational tools, and technical infrastructure. It also includes investment fees related to the financial management strategy, as well as salaries for all operations and administrative personnel.
• New Entities: Includes grants to new entities to support the Ethereum ecosystem. During 2022 and 2023, this includes grants to organizations such as Nomic Foundation, 0x PARC, L2BEAT, and others.

Ethereum Foundation Financial Reserves

As of October 31, 2024, the Ethereum Foundation (EF) holds total financial reserves of approximately $970.2 million, which includes $788.7 million in crypto assets (including the remaining 26,701 ETH committed to user incentive programs) and $181.5 million in non-crypto investments and assets.

The vast majority (99.45%) of the crypto assets are held in the form of ETH. These ETH represent 0.26% of the total ETH supply as of October 31, 2024.

We choose to hold the majority of our financial reserves in ETH to reflect our confidence in Ethereum's potential, and the ETH we hold also represents this long-term perspective.

At the same time, the goal of the Foundation's financial reserves is to provide multi-year funding support for critical public goods within the Ethereum ecosystem.

To achieve this, we follow a conservative financial reserves management policy to ensure adequate resources even in prolonged market downturns. This requires us to periodically sell ETH to ensure sufficient reserve funds for the coming years, while programmatically increasing our fiat reserves during bull markets to support spending during bear markets.

Rise of the Ecosystem, Facing Challenges

The Ethereum Ecosystem

Over the past few years, the Ethereum ecosystem has been continuously evolving. Now there are many organizations and institutions contributing to Ethereum and pushing its boundaries forward, including companies, non-profits, DAOs, L2 organizations, and more. Our ecosystem has never been stronger.

As the ecosystem has grown, these organizations are contributing more funding to the Ethereum community.

Total Treasury of the Ethereum Ecosystem

By 2024, the Ethereum ecosystem will be supported by tens of billions of dollars in funding from the Foundation, organizations, and DAOs.

This chart shows the total value held in project treasuries. This includes both the liquid amounts available for project use and the amounts still vesting. All non-EF data is sourced from DeepDAO (deepdao.io/organizations) as of October 17, 2024.

Most project treasuries are primarily composed of the project's native tokens. This means the total value of project treasuries is far greater than the total value that could be immediately deployed in fiat. If a project were to attempt to sell a large portion of its funds, it could have a significant impact on the price of the underlying token.

Instead, this chart shows us the depth of long-term resources available to the Ethereum ecosystem. Even a small fraction of this capital, deployed gradually over the next 10 years, will provide crucial resources for the development and maintenance of the Ethereum ecosystem.

Total Funding Deployed in the Ethereum Ecosystem in 2022-2023

In 2022 and 2023, organizations in the Ethereum ecosystem collectively deployed over $497 million to support projects across the entire community.

In collecting this data, we used a broad definition of ecosystem funding. This includes funding for Ethereum public goods (such as protocol associations) as well as funding to support larger projects within the Ethereum ecosystem (for example, products that receive grants to build on a specific L2). The data does not include equity investments or similar funding, nor does it include airdrops from token generation events.

The dollar value is calculated using the applicable asset prices at year-end or the specific grant disbursement dates where known information is available.

This information was collected through research on public information and by contacting 94 organizations within the Ethereum ecosystem. However, the existing data is fragmented, and some projects did not respond to our inquiries. The data also does not include the internal spending of many organizations, which often contributes to Ethereum public goods. The data should be considered incomplete.

We have included data on grant allocation platforms (such as Gitcoin). Funding related to these platforms often comes from donations by other organizations (such as the EF). We have tried to de-duplicate the data as much as possible to avoid double counting.

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