On January 21, Eric Conner, a renowned core developer of Ethereum, announced on social media his exit from the Ethereum Foundation (EF), pointing out a series of issues such as lack of transparency, detachment from the community, and resistance to change within the EF.
Criticism of the EF has been ongoing for a long time. Ethereum's weak performance in recent months has further fueled dissatisfaction within the community. Many prominent investors and developers have expressed their opinions and dissatisfaction with the EF, but the departure of a veteran developer indicates that internal disagreements within the EF have reached an irreconcilable point, pushing the EF directly into the spotlight.
As public opinion continued to escalate and the community's anger had not subsided, the Second Foundation was quietly established among the people.
Who is Eric?
Eric Conner, a renowned core developer of Ethereum, left the ecosystem community after nearly 11 years of collaboration with Ethereum, citing Vitalik's rejection of a leadership reorganization proposal.
Eric is a co-author of EIP-1559, a significant network change that altered how Ethereum transaction fees operate. Although he was not formally employed by Ethereum, he provided consultation, investment, and was one of the individuals who led the ecosystem's development since its early days.
On January 21, Ethereum core developer Eric Conner posted on social media, "I am no longer '.eth'. Perhaps one day, those in leadership roles will realign with the community, but for now, I am out. Deep down, I genuinely hope Ethereum succeeds. Good luck."
Core Member Exits to Form "Second EF": How Long Can the Ethereum Foundation Last?
He subsequently posted again about why he joined Ethereum and why he chose to leave. Eric first encountered Bitcoin in 2012. After experiencing the Mt Gox incident, he witnessed many friends suffer heavy losses due to their reliance on centralized exchanges. Eric and a few friends attempted to develop the first decentralized exchange (DEX) on Ethereum—EtherEx. Although the project failed due to its untimely launch, it integrated him into the Ethereum community.
Eric had previously stated that the EF's lack of transparency and increasing detachment from the community were growing concerns. The Foundation could have cut its budget by 80%, and Ethereum would still operate and develop normally. The problem is that the current Foundation does not report to stakeholders, is gradually sinking into a quagmire, and resists change. The Foundation currently exhibits an "anti-victory and competitive mindset," leading many community members to question whether they should stay.
It Didn't Happen Overnight
Since last year's EDCON in Montenegro, dissatisfaction within the industry towards the Ethereum Foundation has begun to materialize. L2, as a solution to enhance Ethereum's scalability, has been shackled with the "Ethereum alignment" from day one, accepting and executing the EF's directives. Everyone is pledging loyalty to Ethereum, aiming to be the most EVM-compatible L2, which has made obtaining EF recognition a more significant concern for project teams than the product and technology itself for a long time, distorting the Ethereum ecosystem under EF pressure.
Core Member Exits to Form "Second EF": How Long Can the Ethereum Foundation Last?
The intricate nepotism within the EF, the ideological constraints imposed by the EF on projects, and the gradual exodus of major protocols from Ethereum while facing betrayal from within—this organization seems to be entering a mid-life crisis, struggling with its structure, efficiency, and culture. With the meme wave driving Solana's resurgence, Ethereum's weak performance several times when Bitcoin broke through previous high barriers, and the recent launch of Trump's token on Solana driving SOL to new highs, Ethereum's decline has become apparent, gradually fueling the community's dissatisfaction with Ethereum. Under public pressure, Vitalik himself posted a response on the 18th, explaining that significant changes were being made to the EF's leadership structure and the specific goals of these changes.
Core Member Exits to Form "Second EF": How Long Can the Ethereum Foundation Last?
This sparked a wave of criticism against the EF.
On the 20th, Kain Warwick, the founder of Synthetix and Infinex, first posted his dissatisfaction with L2: "If I were running the EF, I would definitely pressure Layer 2 to use sequencer revenue to burn ETH. Ethereum has a significant advantage in this negotiation..."
Meanwhile, Stani Kulechov, the founder of Aave, also stated after reading Ethereum's 2024 budget report that he believed there were 12 areas for improvement to ensure the EF's sustainable development, including slowing down the burning of funds, reducing the number of employees, and establishing a sustainable revenue model. However, on the 21st, Stani Kulechov posted again: "I do not advocate for dissolving the EF but rather for a better, faster, stronger, and broader path for the EF... We should focus less on internal politics or neutrality and more on advancing technological progress as soon as possible."
That evening, Evgeny Gaevoy, the founder and CEO of Wintermute, a top market-making institution in the industry, also posted his views on Ethereum, mentioning that Ethereum was currently at risk of falling into a "death spiral": "If there were no casinos, the only use for ETH would be to send things in Zazulu, and the price would be low, and security would be low. As the price of ETH falls, fewer and fewer dapps consider it secure and will flee to other chains, which could create a very (deadly) spiral, further reducing the price."
Facing the sudden onslaught from the community, the EF obviously did not have a comprehensive strategy to quell the anger, and even went against the grain by selling ETH in response to the community's staking suggestions. The next day, Vitalik posted an announcement about the Ethereum Foundation's financial update, stating that the Ethereum Foundation had established a new 3-of-5 multisignature wallet, which the EF would use to participate in the DeFi ecosystem and had already conducted test transactions on Aave.
Core Member Exits to Form "Second EF": How Long Can the Ethereum Foundation Last?
However, the community seemed unimpressed, mocking them for "preparing to sell again." This battle against the EF has not subsided, with the community's anger still smoldering.
Now with the Second Foundation, Which Way Forward?
On January 22, market rumors claimed that Konstantin Lomashuk, the founder of Lido, had established the Second Foundation for Ethereum. Currently, the Second Foundation's official Twitter (@2nd_foundation_) is live, and Konstantin Lomashuk has retweeted its first tweet promptly.
Core Member Exits to Form "Second EF": How Long Can the Ethereum Foundation Last?
On January 23, Konstantin Lomashuk, the founder of Lido, posted again stating that the tweet was just an idea and that the "Second Foundation" had not actually been established.
He expressed 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 indeed established in the future, it must have a clear goal to complement the tremendous work already done by current contributors. "Thank you for your support. I also believe Ethereum needs more organizations to jointly drive its development. I will share more ideas after further communication with those who have reached out to me."
Although this plan has not been implemented yet, combined with Eric Conner's departure, the community has engaged in heated debates about Ethereum's internal and external challenges.
Regardless of the debates within the Chinese and international communities, a consensus is that the Ethereum Foundation needs to make a choice because natural differences exist between left and right wings. One cannot be both left and right. The industry needs the idealism of the left wing during difficult times and the accelerationism of the right wing during times of development. One netizen commented, "If Ethereum takes the route of building a network-based nation, political diversity will inevitably exist. If multiple foundations can compete and cooperate, it will guide Ethereum towards a greater future."
The Second Foundation currently seems like a troublemaker, but some people also wonder why we shouldn't expect decentralized organizations to have more controlling departments to oversee power, just as Vitalik stated in an article on January 21 that the future of the Ethereum blockchain is decentralized, and the Ethereum Foundation is just a part of it. He further pointed out, "The EF should not 'overstep its bounds.' It should confidently represent the parts of Ethereum that it can effectively represent while consciously creating and nurturing open spaces for other organizations to represent other aspects of Ethereum. Some of these aspects are even more suited to exist in for-profit forms.
