The Breakdown - Searching for the Ethereum Foundation's Remaining Cash

Episode Date: June 24, 2026

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Welcome back to The Breakdown, everybody. I'm your host David Kennes, as always. Today is going to be a super quick one because it is sweltering hot in Europe right now. It's in the early 90s in Fahrenheit, where I am right now, which is mid-30, somewhere around there in Celsius. And the breakdown studio is equally hot right now. So we're just going to keep it brief. But today we're looking at the Ethereum Foundation shaker. It continues. We're going to look at the new mandate, the new organizational structure. And we're also going to look at the financials of the Ethereum Foundation as far as we can piece them together, at least. Because as we might already know, it's not the most transparent organization when it comes to its financials.

But if we combine what we can see on chain with its history of financial disclosures over the past couple of years, then we should be able to get a decent picture on what the financial health looks like of the EF moving forward into its next phase. So, without further ado, enough jibba jabber and so on. This is the breakdown. Let's get to it. Nothing said on the breakdown is a recommendation to buy yourself securities or tokens. This podcast is for informational purposes only and any views expressed by anyone in the show are opinions, not financial advice.

Host and guests may hold positions in the company's funds or projects discussed. Okay. So before I jump into this, I do just want to highlight that, you know, unpacking the organizational structure of non-profit foundations is not exactly compelling content. I mean, you have to be quite administration brain. You have to be quite administrative brained in order to really get a kick out of, you know, unpacking the pros and cons of how nonprofits are structured. And that's even within the crypto context as well. It is quite dry. But if I was to style the Ethereum Foundation's reboot, the new structure, it is, again,

a reinforcement of its cipher pump values. And it is really going, deep on the cyphepunk maximalism, which I have to say is really cool. I really do appreciate that quite a lot. We know that the crypto space has been institutionalized. We know the crypto space has been overrun, for want to be a better term of corporations, highly well-funded, for-profit businesses and so on. And it should be. I mean, crypto is a technology. Anybody can use it. And if crypto is a Trojan horse, which many of us do hold dear to our hearts, the crypto, even outside of the Bitcoin context, could be a Trojan horse of sorts that changes Tradfi, that changes humanity. And in the case of Ethereum, at least, it changes

humanity for the better over the next hundred years or even thousands of years in Vitalik's best case scenario. So with that said, I will do my best to point out exactly which parts of this new mandate are really expressing its cyphopunk maximalism once again and to just kind of bring some excitement to this to this whole restructure and i mean so to give context i think we know that many many people i mean i think it's over a dozen it might be close to two dozen people at least prominent figures within the ethereum foundation have left over the past couple of months over the past few months and that is all to do with its it's its new mandate its new positioning and its new lean structure that Vitalik is trying to piece together and the other board members too. So this came out

yesterday on Tuesday, June 23, the EF's new structure. Today, the EF is changing shape, concluding a month's long process of reorganization as part of the implementation of the mandate and the Treasury Management Policy. We come out of this process with the structure, activities and people necessary for execution on the critical tasks ahead of us, but also with 54 fewer colleagues, which is roughly 20% of the EF, many of whom will be finding ways to contribute to Ethereum from outside the EF in the coming week. So we're going to cover that briefly as well. So it's a downsizing of the Ethereum Foundation. And I mean, a 20% reduction in workforce is, of course, quite significant, but it's a non-profit. I know that we have jumbled up all of these terms

and it was a lot of regulatory arbitrage to avoid the SEC that we would have these. foundation as a front and then you will also have the Dow as part of that in order to just create some distance between the software program as the business side of whatever protocol that might be and the regulators. What that has caused is I mean I think we're programmed now in crypto to consider a foundation as a pseudo business or at least one that operates with the intention to boost the business and profit-making footprint of the protocol as a whole, even within a non-profit structure. But the Ethereum Foundation, I would say, is probably the quintessential example of a

non-profit in the traditional sense that crypto has. So if it loses 20% of the workforce, I mean, does a nonprofit have a workforce or does it just have contributors? You know, I mean, it's just this kind of linguistics that I think that we have lost touch of throughout the past few years, particularly under the previous SEC regime that made this, I termed it the triangle of decentralization in a past episode, that you would have a foundation and a Dow and then a labs. We're seeing that wash away and maybe soon we will see a return to a foundation or nonprofit within the protocol ecosystem. that really does to its core represent the values of a nonprofit as at least led by example by the Ethereum Foundation.

So the EF now has five clusters with different domains of work. And we have a, I mean, we know that Ethereum loves these big tree maps and so on. So the different domains of work, there's the protocol layer, the access layer, the user layer, community layer, and institutional layer. And then there's things like management and ops and so. on. How the protocol layer is described is that it ensures that Ethereum delivers on its foundational promise of scaling and self-sovereignty. So this is really just about hardening the Ethereum protocol itself to be resistant from censorship and capture that we're going to get into and a moment. And also scaling. There's really, again, a refocus on layer one scaling because we all know

how the layer two scaling roadmap has played out thus far. So the access layer, it is is all about crops, this acronym that has popped up in the past few months from Vitalik. That is censorship resistance and capture resistance, open source, privacy and security. So everything to do with the access layer, everyone working in pursuit of the access layer, is mandated to really make all of those properties within the Ethereum ecosystem as robust as possible. Then we have the user layer, so it is about extending tools and norms that make Ethereum as user-friendly as possible. It helps the EF understand that the EF understand, the capabilities that matter most, the failure modes that are most serious, and the trade-offs

that are acceptable to settle on where necessary. Then we have the community layer, so the Ethereum Foundation will have an outward facing community layer that owns how the EF shows up in the world, both within and beyond the Ethereum ecosystem. Its job is to make legible what the EF stands for and how that materially difference from zero-sum financial crypto, from corpo-compromised crypto and from the bland status quo preserving and perversely incentivized grant managing parts of the non-profit world which are vulnerable to use for laundering geopolitical interests. That copy is, it's beautiful to read and it is really, of course, Cypethpunk focused at the end of the day. So it's cool to see that being reinforced, at least in this new EF structure blog post.

Next we have the institutional layer, the last layer. And that is really focused here around institution. So, okay, I mean, we have this very crops-focused protocol and all of that, but Ethereum is telegraphing here that it is very aware that this is an institutional bull market and it could be a bull cycle from here that is still gaining steam. And a big part of that will be onboarding institutions to be able to use Ethereum for what it is intended to be used for, at least as directed by the EF. How they describe that, in all cases, our goal, is to prioritize creating showcases of effective integration of Ethereum and cryptographic technologies that maximizes crops properties and the guarantees that are made available to both

institutions and users, such as guaranteeing fair and correct execution, ensuring data portability and more generally practical ability to exit, protecting all actors' privacy, proving authenticity of data, better detecting or even preventing misbehavior and more. So if institutions need to use Ethereum or want to use Ethereum, then it should be a fair and level playing field for both the institutions and the users at the same time. So quite a lofty goal, but if you have a neutral base layer, then it should be achievable. That is the idea at least. One thing I found interesting is that they have offered severance packages to the 54 individuals who were downsized as part of this most recent downsizing. They offered one month's pay per year worked at the EF and the amount

locally mandated by the individual's jurisdiction. This is the same severance we offered to the colleagues who left the EF in the past few months. So until now, a lot of the, it has been styled that these individuals have been leaving because they've been disgruntled or by the new lean direction of the EF. But they also offered severance and so on. So I'm not too sure if the messaging that we have received, or at least that we have filtered so far as has been totally correct. Maybe the EF is advising people to move on or at least give them the option to, but this is just conjecture from me right now. Some of those people have ended up at

Heath Labs, which is another non-profit, a non-profit R&D Lab for Ethereum and Eith. And we have a few high, we have six high profile or five high profile individuals who are the primary contributors of ETH Labs so far. And this is something. that has only popped up in the past week or so. The thesis here of ETH Labs. ETH Labs is a nonprofit R&D lab for Ethereum. And ETH, our mission is to make Ethereum the settlement layer of the global economy. The internet became global because shared protocols created a common language between networks.

Private systems remained useful but bounded. Finance is approaching a similar moment. As value assets and markets become digital, the world needs shared settlement infrastructure. So now Ethereum has another R&D nonprofit that is focused on promoting real usage from the builders at the frontier and the protocol and the protocol that has to support it. We work with users, applications, wallets, L2s, infrastructure teams, institutions, eth holders, core devs and researchers, then turn what they actually need into protocol work, shared standards infrastructure and shipped products. They say

ETH Labs is independent but Ethereum is a shared projects. We are one node in a much larger network of stewards. This is the multi-node future. So all this is very exciting. I mean, Heath Labs is also funded by Bitmine, which is Tom Lee's, Tom Lee's joint. We also have Joe Lubin and his Sharplink that are funding the initiative from the get-go. And we have some other contributors as well and a growing list of community members, including many people from the Ethereum Foundation as well. So a lot happening behind the scenes of the Ethereum ecosystem, I suppose you could say. So how much money does the Ethereum Foundation have left?

I mean, that's the next obvious question. Because if we are meant to be, you know, supporting this new lean structure, we've had to downsize and so on, well, what is the financial health of the Ethereum Foundation to date? And I mean, maybe you're aware, but it is quite difficult to pin down the true financials of the Ethereum Foundation.

But we are going to try very quickly. So just to give you some context about the E.S. It's registered in Switzerland in the in the Zag and it was set up in mid-2014. So it's been going for about 12 years right now. And in the first eight years, there was no formalized financial disclosures at all. So all people could do was track its on-chain wallets to understand what the EF was doing over time. And, you know, it would routinely sell ETH, which is I suppose it's prerogative, especially around the tops of different ball markets.

So, I mean, it famously sold 70,000 Eth around the 2017 top. It sold 20,000 Eth the day after the November 2021, all-time high as well. The first actual financial report from the EF came in April 2022. And that disclosed holdings as of the end of March of that year. And we're going to look at that as well. It would be more than two years, about two and a half years after that, that we received another financial disclosure from the Ethereum Foundation. And that was for Halloween in 2024.

And since then, we have not had any formalized financial disclosure from the EF. What we did get in June last year was a new treasury policy, a new treasury policy that formalized internal reporting for finances. and the finance team from the EF would report to the board and the management. But those reports were kept entire, were and are still kept entirely internal. So it is a non-profit. It is for a blockchain that prioritizes transparency and self-sovereignty in all areas. But it is not exactly fully transparent with its actual financial health.

But of course, we can comb through its on-chain data to get a sense of what it is, what it is happening. So another thing, what it does do is that every quarter, the EEF does release a blog post that states which grants and funding have been given to whom. And it doesn't have a, those aren't itemized to the dollar, but it does tell you which projects they are funding, which grants they have handed out. And what the totals are for those grants being handed out per quarter. So what I've done is I've piece together those financial reports and I've also looked at the on-chain data to see if there's anything to read there. And this is what I've come up with. And so just first, a disclaimer, this is just very quick analysis. And it is based as not a complete on-chain reading of what the EF is doing. Maybe I've missed certain things. If someone from the Ethereum Foundation watches this and sees that it is wrong, then maybe you should release more accurate financial. disclosures more regularly and this wouldn't happen. But in any case, this is, I believe, quite accurate in terms of estimates for the current health of the Ethereum Foundation. So, what have we got? The first two columns that you're seeing here are the actual financial disclosures.

So we know that these are accurate. In March 2022, the Ethereum Foundation had $1.3 billion worth of crypto and that was made up mostly of ether in March 2020. And perhaps you remember, March 22, I mean, things were looking okay into crypto space around this time. We had just, I mean, the all-time high for that, for the most recent cycle at the time was in November 2021. And we were just coming down off the back of that. And of course, it would be two or three months later that terror would implode. And then another five months after that, FDX would implode. So this was before the chaos erupted in that particular year.

On top of that, it disclosed around $302 million worth of non-crypto assets, which could be US dollars and so on. The next financial disclosure, of course, was two and a half years after that. And by that point in time, its ether that it had held was down to $788.7 million. The difference between the ETH unit counts at that time, in March 2022, it held around 356,000, 1,000 ETH. In October 2024, that ETH had been reduced down to 313,000 Eth. So a reduction in prices, but also a reduction in the actual units held. And its non-crypto assets had almost been cut in half between the two disclosures from 302 million down to $181.5 million in US dollars, So in the two and a half years between March 2022 and October 2024,

the Ethereum Foundation's treasury had been reduced by about half a billion dollars, from $1.6 billion down to $970 million. From there, we haven't had any legitimate or at least complete financial disclosures. So what I have up on my screen is me piecing this together from its on-chain, from what we can see on-chain through Arkham. it currently has $210.4 million worth of liquid crypto. But of course, since the defy punkening of the Ethereum Foundation after, there was much criticism that it wasn't even stating any of its ether,

it wasn't earning any yield in Avey and so on, that perhaps it should be making use of its ether stash, rather than just periodically selling it on exchanges, it seems. So you can actually figure out how much. that the Ethereum Foundation has sent to the beacon chain and so on. So, and this is again the estimates from myself based on the on-chain data. It appears as though the EF has around $100 million worth of crypto locked in a nosus safe multi-seek. It also has $136 or nearly $137 million currently in Avey.

And it also has $27.1 million worth of eat each. state to the beaten chain. So it seems as though the EF's crypto that it is retained is currently worth about $471 million, which again has been cut in half since October 24. So what we don't have here is the non-crypto holdings of the EF. And it could be that it has a similar amount from its last disclosure, but this sum here of $470.1 million is just the crypto that we can apparently see. So in about a year and a half, a year and three quarters since its previous disclosure, it seems as though the EF's crypto holdings that it has access to has reduced from $788 million, nearly $789 million, down to around $471 million.

So that is quite the reduction. Not exactly half, maybe around a 40% reduction or 35% reduction there. But it has also sent a ton of Ethereum to exchanges over the years. And we can't see that. So perhaps it has a bunch of Eath sitting on exchanges, some part of custody mechanism instead of keeping it all, instead of keeping it all self-custody, perhaps it's using it on exchanges as custody.

Perhaps it has sold it. I do have a chart for that. So here we can see, and this is for the past 10 years. So basically the entire on-chain history of the EF, it has sent about $2 billion, over $2 billion worth of ETH and crypto, two exchanges. We don't know if that has been sold. We don't know how much of that has been retained as cash, and that's what the non-crypto disclosures were in the past.

Perhaps it still has a lot of cash sitting on exchanges, we just don't know. And you can see how that compares to the crypto that has been sent to be staked or kept in NOSUS safe multiseachs and so on. So perhaps it could be that the EF Foundation's Treasury is much larger than what I have represented here in June 2026, accounting for some of the cash proceeds from its crypto selling overtime. We just don't know. So again, take these numbers with a grain of salt. but let's also take a look at the amount that the EF has that is that is dished out over time. And here we can see it's been very steady actually.

The first disclosures began for ESP grant allocations in Q1, 2022. And they've actually gone up over time on average, it seems. Every quarter between $5 and $10 million worth of grants are dispersed. At times there is a big spike in growth. grant allocations up to $30 million on two occasions, one in Q4, 2023 and one in Q1, 2025. But we can see that the Ethereum Foundation is indeed allocating and granting projects, money to projects, quite steadily. So as a non-profit, it does seem to be at least functioning as described as and as intended.

So that gives some context about the money situation at the EF. and I'm just going to end on this tweet from Adriano Ferrier, who says that when the Ethereum Foundation was larger, the FUD was that it made Ethereum too centralised. Now that the EF has significantly downsized and the influence is spreading across a broader set of organizations, the new FUD is that the EF has become too small, clown emoji. And I think it is the healthiest thing possible

that we do have a small Ethereum foundation, at least one that is able to, I mean, for want of a better term, weaponize its treasury for the pursuit of cypherpunc goals. I think that this is where the Ethereum ecosystem in general is its most powerful and most differentiated between all the other chains. So it only makes sense that they go harder and deeper into this overtime. So that's enough out of me today. I'm going to go get cool in the aircon, in the AC somewhere else in the bunker and write out

this heat wave a little further. Hopefully you are all doing something somewhat similar if you are suffering through this heat wave as well. So that's enough out of me. Enjoy the rest of your day. And as always, look after yourselves. Goodbye.