Ethereum Foundation’s recent transfer of 35,000 ETH valued at $96 million, to a wallet associated with the Kraken exchange has sparked speculations across the community over its potential market impact.
EF Executive Defends Its Move As Routine Action
However, the Ethereum Foundation Executive Director Aya Miyaguchi in her defense clarified that the recent transfer is part of the Foundation’s routine treasury management. “EF has a budget of ~$100m per year, which is largely made up of grants and salaries, and some of the recipients are only able to accept in fiat,” the nonprofit’s executive director added.
She further added, “This year, there was a long period of time when we were advised not to do any treasury activities due to the regulatory complications, and we were not able to share the plan in advance. Also this transaction is not equal to a sale. There will be planned and gradual sales from here on.” She highlighted that it was executed to balance their financials and it did not indicate an imminent sale.
Criticisms From The Community
Miyaguchi’s response was not sufficient as Gabriel Shapiro, a crypto attorney and co-founder of Metalex Labs, argued that despite the Ethereum Foundation (EF) spending $100 million each year, there’s a lack of clear direction in terms of maximizing the value of ether or even the Ethereum network as a whole.
Aave-Chan, Initiative founder Marc Zeller also expressed dismay with Miyaguchi’s statement. “100m$/year for what?” Zeller asked. “The Geth team, truly deserving, receives meager pay despite critical work. Once the Purge & Verge upgrades are delivered, it’s time to seriously consider defunding and dissolving the Ethereum Foundation,” he added.
Was The Action Essential?
While some of the community members view the foundation’s actions as essential for sustaining its mission, others question whether its spending aligns 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 expenditure is justified. Nevertheless, he expressed concerns over why the grants were heavily inclined toward tools over onchain apps. He also questioned why the Foundation doesn’t explore more revenue streams, such as staking its billion-dollar ETH holdings.
Former Ethereum Foundation employee Hudson James also defended the organization’s expenditure. Arkham Intelligence pointed out how the Foundation’s selling activity impacts the market, given its history of ETH Sales at various price points. This pattern has fueled speculation that the recent transfer might signal either a market top or a potential price surge.
