The Ethereum movement, led by flagship organizations like the Ethereum Foundation and Brooklyn-based conglomerate ConsenSys, emerged from Blockchain Week 2019 with a common goal and a newfound sense of urgency.
In short, building Ethereum 2.0 – the blockchain network’s ambitious reinvention plan – requires maturity.
“The only people left are the ones who want to be here and work hard,” said former Ethereum Foundation advisor Eva Beylin of the broader Ethereum ecosystem. She spoke to CoinDesk at the ETH New York hackathon last weekend, where around 50 developers sat nearby, coding and chatting with little fanfare.
At the beginning of the week, the mood at the Ethereal Summit in Brooklyn, organized by ConsenSys, was similar, if certainly more noticeable.
There, Virgil Griffith, head of the Ethereum Foundation’s special projects, told CoinDesk that relations with ConsenSys are getting better and better despite the ongoing distrust between the nonprofit crowd and the for-profit company led by Joseph Lubin, co-founder of Ethereum.
“We have decided to outsource all of the value collection to ConsenSys,” said Griffith. “A lot of people in the foundation are wary of ConsenSys. But I think you can work with someone who has a different point of view than you. “
Indeed, despite their different goals, the heads of these two organizations arguably exercise the greatest influence on the development and use of Ethereum. Based on CoinDesk’s conversations with 10 high-level people connected to Ethereum’s top projects, this blockchain week could have been a turning point.
Amanda Gutterman, CMO of ConsenSys, also said CoinDesk’s relationships with the Ethereum Foundation are now better than ever, even as ConsenSys seeks to monetize some of the products and services that the wider ecosystem relies on. This happens when the company emerges from a winter marked by layoffs and lingering doubts that its portfolio of startups can be spun off the ConsenSys mothership.
In the meantime, the Ethereum Foundation has focused more on supporting DeFi (decentralized finance) applications such as Uniswap and MakerDAO. Two project supporters say they embody the collaborative spirit of Ethereum.
“We can and should build a financial system that is fairer and more open,” Uniswap founder Hayden Adams told CoinDesk.
In stark contrast to the individualistic Bitcoin ethos, the DeFi movement is specifically focused on rebuilding the global financial system. Uniswap, now containing more than $ 14.9 million worth of ether, was developed under the guidance of Ethereum inventor Vitalik Buterin and funded by a grant from the Ethereum Foundation before venture capital was raised in April 2019.
Even so, Adams told CoinDesk that there were still questions as to whether Buterin’s cohort could “pull through” a working version of Ethereum 2.0.
In the meantime, ConsenSys alum and SpankChain CEO Ameen Soleimani has emerged as a community organizer and announced to Ethereal that its MolochDAO to finance Ethereum infrastructure projects will be jointly funded by Lubin, Vitalik and a group of employees from the ConsenSys and Ethereum Foundation .
Soleimani told CoinDesk he hoped 2019 will be a time for collaboration.
Speaking of Lubin and Buterin’s leadership, Soleimani said:
“They have certainly guided us so far and seem well-positioned to make the best decisions.”
Based on interviews with numerous Ethereum veterans in various organizations, it seems that crucial decisions are on the horizon.
On May 10 at Ethereal, Aya Miyaguchi, executive director of the Ethereum Foundation, said the nonprofit plans to spend $ 30 million on ecosystem development this year.
One of the foundation’s key wallets shows that 2018 was a year of peak spending. By January 2019, the balance had dropped from $ 600 million to $ 67 million. Even calculated in ether, the foundation issued around 100,000 tokens from this primary wallet last year and only has 643,536 tokens left.
While Miyaguchi at Ethereal said the nonprofit employs more than 100 freelance contractors, she later told CoinDesk that there isn’t a “clear line” between the support structures offered to different teams. This applies to both professional contracts and grants. Instead, she said that the foundation makes decisions on a case-by-case basis by assessing, “What are the most important things we need to support?”
According to Lane Rettig, a former Ethereum Foundation employee who was laid off earlier this year and then turned into a controversial but still admired figure on Twitter, the foundation plans to downsize to reduce the burn rate.
Griffith confirmed that the Ethereum Foundation’s long-term plan, currently under review, is to reduce its role in direct funding and governance by encouraging the growth of the external community. However, no official plans for it – or downsizing – have been made so far, Miyaguchi said.
“It’s not about relaxing. It’s about shifting our role, ”she told CoinDesk, describing the foundation’s new role as one of“ coordinating ”between other actors to help them build tools and use cases.
Currently, the nonprofit has no income model and relies primarily on reserves from the original sale of Aether tokens in 2014. Therefore, their future depends on building strong partnerships that can continue to function after the grant funding is torn down.
Based on discussions with multiple sources, it appears that the nonprofit’s priorities include developer projects like MolochDAO, then industry collaborations with companies like ConsenSys and Microsoft, and finally partnerships with government agencies, most of which are still in the exploration phase.
It remains to be seen which external organizations will devote significant resources to maintaining the Ethereum network, and partnership building is certainly not immune to infighting. An anonymous source told CoinDesk that Microsoft had received complaints from Buterin, for example about an alleged lack of focus on Ethereum in the technology giant’s decentralized identity project (DID).
Buterin himself outlined some of the plans to make Ethereum work to scale in a proposal released during Blockchain Week. Insiders tell CoinDesk that a driving force behind the move towards greater coordination is an incipient realization: this could be the year the community finds champions to implement that vision or not fully scaled.
ETH New York Photo by Christine Kim for CoinDesk