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ethereum Foundation (EF) contributor Josh Stark x.com/0xstark/status/1828416179993522386″>aware a breakdown of the organization's spending over the past two years on social media on Aug. 27.
Stark shared the information after speculation mounted that the foundation might be planning to sell a large amount of ethereum. The rumors surfaced after a wallet linked to the foundation made a large transfer.
Stark also hinted that the foundation intends to release an expenditure report before this year's Devcon, which is scheduled for Nov. 12.
Breakdown of financing
Stark shared two pie charts showing the foundation’s funding allocation for 2022 and 2023. The charts contain seven main areas: new institutions, L2 R&D, applied ZK, community development, developer platform, internal operations, and L1 R&D.
In both years, the majority of funding went to research and development (R&D) for Layer 1 improvements and new institutions. Stark explained:
“These charts reflect both internal and external spending. For example, ‘L1 R&D’ includes grants to external customer teams and also includes internal EF researchers. In both years, internal spending was around 38% and external spending was around 62%.”
Internal spending relates to teams working under the EF umbrella across different sectors, such as the Geth client teams, Solidity, Devcon, and the ethereum Organization.
Meanwhile, external spending is related to grants awarded by the foundation's Ecosystem Support Program (ESP). Between 2022 and 2023, the ESP provided $91.1 million in grants to 895 different projects, according to ethereum.foundation/”>data collected from their website.
Stark noted that ESP publishes quarterly reports on grants awarded to new projects, with the aim of latest edition describing the grants awarded in the first quarter of 2024.
Referring to the “new institutions” category, Stark highlighted that this is one of the foundation’s efforts to “help build new organizations that can strengthen and support the ethereum ecosystem in the long term.”
Stark mentioned entities such as open-source software provider Nomic Foundation, the Decentralization Research Center, data aggregator L2Beat, and “other ethereum-related and adjacent bodies” as examples.
ethereum co-founder Vitalik Buterin shared Stark's post and reiterated the importance of investments made in new institutions. x.com/VitalikButerin/status/1828418027034972507″>aggregate that “there is no research on insect proteins from the World Economic Forum” within the foundation's funding allocation.
The $94 million transaction sparks debate
Stark shared the funding breakdown after a big Transfer of 35,000 eth On August 23, EF’s wallet was diverted to the Kraken cryptocurrency exchange, causing quite a stir. The large amount, equivalent to $94 million at current prices, sparked debates in the cryptocurrency community about where the funds would be allocated.
Given the significant size of the transaction, investors were concerned about a potential drop that could add further pressure to its price as eth has fallen 22% in the past 30 days.
The angel investor known as DCInvestor x.com/iamDCinvestor/status/1828423017631723942″>suggested Buterin believes the next big trades should be broken up into 12 smaller moves, which would help allay fears of a market crash.
Buterina x.com/VitalikButerin/status/1828469217714204841″>answered that the proposal addresses the logistical challenge of coordinating multiple transfers from a multi-sig wallet that requires four confirmations. Multiple transactions would mean the transfer would have to be signed 48 separate times. He added:
“Of course there are solutions (e.g. multiple levels of wallets), but for obvious reasons we don’t want to rush into something so security-sensitive.”
