USDVitalik Buterin Faces Growing Pressure Over Leadership Decisions
Leadership Disputes and Ethereum Foundation Challenges
The Ethereum Foundation is navigating turbulent waters as its leadership structure faces scrutiny from critics calling for major changes. Central to the debate is Aya Miyaguchi, the Foundation’s Executive Director since 2018, who has been targeted with accusations of inefficiency and alleged mismanagement.
Suggestions to replace her with figures like Danny Ryan, who spearheaded Ethereum’s transition to Proof of Stake (PoS), or Jerome de Tychey, have gained traction among community members. Critics argue these changes could strengthen Ethereum’s operational strategies and even bolster Ether’s market performance.
Vitalik Buterin, Ethereum’s co-founder, responded forcefully to these calls during a series of statements from January 18–21, 2025. Declaring that decisions regarding Ethereum Foundation leadership rest solely in his hands, Buterin reaffirmed his authority, stating, “The person deciding the new EF leadership team is me.”
He condemned what he described as a toxic campaign against Miyaguchi, emphasizing that harassment and intimidation harm not just individuals but the broader Ethereum ecosystem. Reports of death threats and derogatory remarks targeting Miyaguchi led Buterin to label such behavior as "pure evil," warning that it risks driving away top talent essential to Ethereum’s future.
Community dissatisfaction extends beyond leadership disputes, touching on broader issues within the Ethereum Foundation. Critics have pointed to delays in rolling out upgrades like Dencun, which is designed to enhance data handling, as well as what they see as insufficient support for decentralized finance (DeFi).
Allegations of poor communication between the Foundation and developers have only fueled tensions. Financial decisions by the EF, including periodic Ether sell-offs to cover operational costs, have sparked concerns over sell pressure impacting Ethereum’s market dynamics. As of January 2025, the Foundation’s treasury holds 269,000 ETH (approximately $894 million), a notable decline from 617,000 ETH in 2020.
In an effort to address these criticisms, Buterin outlined plans for structural reform within the Foundation. These include the establishment of a "proper board" to decentralize decision-making, enhanced transparency in financial management, and increased focus on recruiting technical expertise.
Despite these proposals, he has remained firm in his vision of preserving Ethereum’s neutrality, cautioning against centralized lobbying efforts or ideological shifts that could compromise the project’s decentralized ethos. Instead, Buterin advocates for alternative organizations to assume roles beyond the Foundation’s scope, reinforcing Ethereum’s position as a platform for innovation.
Amid these challenges, the Ethereum Foundation has committed significant resources to supporting the ecosystem. On January 20, it allocated 50,000 ETH (approximately $165 million) to bolster DeFi development, with funds managed through a multisig wallet for app builders.
While some have praised the initiative, calls for greater financial transparency and improved communication persist. Critics argue that staking portions of the Foundation’s holdings could help mitigate operational costs without relying on sell-offs that affect market sentiment.
The controversies and reforms come at a pivotal time for Ethereum, following technical milestones like the successful transition to Proof of Stake and ongoing work on the Dencun upgrade. Yet, frustrations over delays and internal divisions underscore a broader challenge: balancing the community’s demands for efficiency and progress with Ethereum’s commitment to decentralized governance.
Eric Conner’s Departure Sparks Controversy
Eric Conner, a former Ethereum core developer, announced his exit from the Ethereum Foundation (EF) on January 21, citing dissatisfaction with the organization’s leadership and structural inefficiencies.
Conner criticized EF’s leadership, particularly Executive Director Aya Miyaguchi, labeling the foundation a “leftist-driven, anti-winning swamp.” His comments extended to questioning Miyaguchi’s qualifications and leadership since her tenure began in 2018. He joined a growing group of critics demanding her resignation, blaming her for inefficiencies within the foundation.
Conner’s departure underscores deeper concerns within the Ethereum ecosystem. Sharing his vision for the future, Conner highlighted the need for blockchain to support open and fair AI development. He will now focus on advancing blockchain and AI integration through his new role at Freysa AI, emphasizing the importance of collaboration across ecosystems to ensure technological equity.
Declining Onchain Activity Highlights Ecosystem Challenges
Ethereum’s recent performance has drawn further scrutiny. Onchain activity plummeted 38% in one week to $36.5 billion, significantly underperforming competitors like BNB Chain, which surged 112%, and Solana, up 36%. Major decentralized applications such as Balancer and Morpho reported declines of 65%, while Uniswap’s activity dropped 40%, raising concerns about Ethereum’s decentralized app ecosystem. Adding to the pressure, Ethereum fell out of the top five blockchains by fee revenue, generating just $46 million compared to Solana’s impressive $309 million.
Layer-2 scaling solutions offered some relief, collectively handling $25.8 billion in weekly decentralized exchange (DEX) volumes. However, Ethereum’s base layer remains burdened by high transaction fees averaging $5.50. Critics argue these fees discourage decentralized app adoption and have called for solutions such as fee increases or reduced inflation to better align staking rewards with transaction costs.
Solana and Justin Sun Add to Competitive Pressures
Solana has emerged as a formidable rival, surpassing Ethereum in weekly activity with $118.6 billion, driven in part by the TRUMP memecoin launch, which fueled a 200% spike in trading volume on platforms like Raydium, Orca, and Meteora. Solana’s total deposits rose 29% to $11.2 billion, overshadowing Ethereum’s Layer-2 deposits of $8.2 billion. While Ethereum still holds a significant $66 billion in total value locked (TVL), Solana’s rapid growth has added to investor uncertainty.
Tron founder Justin Sun also weighed in with bold proposals for Ethereum. He suggested halting all ETH sales by EF for three years to stabilize the market, urging the foundation to cover operational costs through decentralized finance activities like staking and lending. Sun proposed generating $5 billion in revenue from Layer-2 projects via taxes to fund ETH buybacks and burns. He also recommended organizational reforms, including significant staff reductions and higher compensation for retained employees to boost efficiency.
Sun’s projections, though ambitious, forecast ETH reaching $4,500 within a week of implementing these changes and potentially $10,000 long term. Yet, unresolved leadership disputes, diminishing staking incentives, and lagging onchain performance have left investors cautious. Ether’s price, stagnating below $3,500 since early January, mirrors the broader concerns about Ethereum’s competitiveness and direction amidst a challenging market landscape.
Amid the saga, a mysterious Twitter account, “Second Foundation,” emerged as a protest against the EF, although it does not intend to establish a real splinter organization. This controversy reflects deep discontent within the Ethereum community, showcasing a lack of trust in the original foundation. Experts note that this situation indicates a "mutiny," highlighting serious internal challenges. Although not officially forming, the 'Second Foundation' has ignited important discussions within the splintering Ethereum community amidst self-criticism of the Ethereum Foundation.
Meanwhile, Ethereum co-creator Joseph Lubin has called on former EF researcher Danny Ryan and Ethereum France President Jerome de Tychey to co-lead the Ethereum Foundation, aiming to bring fresh energy and creativity, amid criticism of current Executive Director Aya Miyaguchi for her perceived passivity.
This article has been refined and enhanced by ChatGPT.
