The recent transfer of 35,000 ETH, worth $96 million, by the Ethereum Foundation to a wallet linked to the Kraken exchange has fueled speculation within the community about its potential impact on the market.
EF board defends its decision as routine action
However, Ethereum Foundation Executive Director Aya Miyaguchi clarified in her defense that the recent transfer is part of the Foundation’s routine treasury management. “EF has a budget of ~$100m per year, which largely consists of grants and salaries, and some recipients can only accept fiat,” the nonprofit’s executive director added.
She added: “This year, there was a long period where we were advised not to do any treasury activities due to regulatory complications, and we could not share the plan in advance. Also, this transaction does not amount to a sale. There will be planned and gradual sales from now on.” She stressed that it was done to balance their finances and did not indicate an imminent sale.
Criticism from the community
Miyaguchi’s response fell short, as Gabriel Shapiro, a crypto advocate and co-founder of Metalex Labs, argued that despite the Ethereum Foundation’s (EF) annual spending of $100 million, there is a lack of clear direction when it comes to maximizing the value of ether or even the Ethereum network as a whole.
Aave-Chan, Initiative founder Marc Zeller also voiced his displeasure with Miyaguchi’s statement. “$100m/year for what?” Zeller asked. “The Geth team, who truly deserve it, is getting a meager reward despite critical work. Once the Purge & Verge upgrades are delivered, it’s time to seriously consider dissolving the Ethereum Foundation and cutting off funding,” he added.
Was the action essential?
While some community members view the foundation’s actions as essential to continuing its mission, others question whether the foundation’s spending is aligned with the long-term growth and stability of the Ethereum network.
Mudit Gupta, Polygon’s Chief Information Security Officer, argued that the Foundation’s $100 million annual spending is justified. Still, he raised concerns about why the grants were heavily focused on tools rather than onchain apps. He also questioned why the Foundation isn’t exploring more revenue streams, such as staking its billion-dollar ETH holdings.
Former Ethereum Foundation employee Hudson James also defended the organization’s spending. Arkham Intelligence pointed out how the Foundation’s selling activity is impacting the market, given its history of ETH sales at various price points. This pattern has fueled speculation that the recent transfer could signal a market top or potential price surge.
