The Ethereum Foundation (EF), a non-profit organization driving the development of the Ethereum blockchain, has published its first financial report in 2.5 years. This announcement has sparked significant interest in the crypto community, as the long period of silence had fueled rumors and speculation about how the organization manages its substantial resources. Let’s delve into how much money EF has, where it’s being allocated, and why this information is crucial for Ethereum’s future.

November 10, 2024
Franc Smidt,
Journalist, Germany

How Much Money Does the Ethereum Foundation Have?

As of October 31, 2024, the Ethereum Foundation (EF) reported assets totaling $970.2 million. The majority of these funds ($788.7 million) are held in cryptocurrencies, predominantly ETH, representing approximately 0.26% of the total ETH supply. The remaining $181.5 million consists of non-crypto investments, including fiat currencies, real estate, and other financial instruments.

Asset Breakdown:

• Cryptocurrencies: $788.7 million (99.45% in ETH).
• Non-crypto assets: $181.5 million.

Interestingly, EF actively employs a strategy of periodically selling ETH at market peaks to convert it into fiat currencies. This approach helps maintain financial stability even during bear markets.

Where Does the Money Go?

In 2023, the Ethereum Foundation spent $134.9 million, allocated to ecosystem development, research support, and blockchain infrastructure improvements.

Key Expenditures:

• 63%: Funding new projects and initiatives to expand the Ethereum ecosystem.
• 37%: Enhancing Ethereum’s core infrastructure, including protocol development and scalability technologies.

Some of the notable projects receiving EF support include Argot Collective, Geodework, L2BEAT, Nomic Foundation, and 0xPARC. These initiatives focus on improving Ethereum’s security, decentralization, and scalability—core priorities for the platform.

New Policies to Prevent Conflicts of Interest

In May 2024, the Ethereum community was shaken by revelations that two EF employees, Justin Drake and Dankrad Feist, held senior roles in the commercial project Eigenlayer—one of the largest restaking protocols in the ecosystem. This raised concerns about potential conflicts of interest.

In response, EF introduced new policies to address such issues:

Employees are prohibited from investing more than $500,000 in liquid crypto assets.

Participation in early funding rounds of crypto startups is capped at $100,000 per deal and $400,000 per year.

All exceptions require separate approval.

EF emphasized its role as a neutral organization that supports projects based on their value to the Ethereum ecosystem rather than commercial gain.

Restaking and Its Impact on the Ethereum Ecosystem

A significant topic in the report was the mention of restaking technology, which is gaining traction in the crypto space. Restaking allows locked staking assets to secure third-party applications, providing additional income opportunities but raising concerns about centralization and risks.

A notable example is the aforementioned Eigenlayer, which has amassed over $12 billion in user deposits, making it one of the largest applications in the Ethereum-based decentralized finance (DeFi) ecosystem.

Transparency and Accountability

EF asserts that transparency remains a top priority. However, the latest report has raised questions. In 2022, EF reported $1.3 billion in crypto assets and $300 million in fiat. The decline in assets may be attributed to extensive funding initiatives, but the exact reasons remain unclear.

Nonetheless, the publication of the financial report and the implementation of new policies underscore EF’s commitment to openness and accountability to the crypto community.

The Ethereum Foundation continues to play a pivotal role in developing the Ethereum ecosystem. The 2024 financial report demonstrates that the organization has substantial reserves and actively invests in projects shaping the blockchain’s future. However, strengthening conflict-of-interest controls and ensuring financial transparency remain critical to maintaining community trust.

Publishing the report is not merely a formality but an important step in reaffirming EF’s status as a reliable leader and driving force for innovation in the cryptocurrency world.