Vitalik Buterin defends EF as it continues to dump more ETH in 2025

ethereum co-founder Vitalik Buterin defends the ethereum Foundation's decision to dump eth rather than stake or withdraw from itself.

According <a target="_blank" rel="nofollow" href="https://x.com/spotonchain/status/1876945326000758887?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1876945326000758887%7Ctwgr%5E4d1550f26f86d89f14630ccb709f3ca4e4984b65%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fu.today%2Fethereum-foundation-conducts-first-eth-sale-in-2025-amid-big-price-slump” target=”_blank”>data From Spot On Chain, the ethereum Foundation held its first ethereum (eth) sale in the new year on January 8, 2025, dumping 100 eth and earning 329,463 DAI (DAI) tokens in exchange. On-chain data reveals that throughout 2024, EF has sold a total of 4,466 eth for $12.61 million at an average value of $2,823. It is claimed that these sales usually occur just before sharp price drops.

x traders were quick to criticize EF for continually dumping eth instead of staking from its own protocol.

“To be completely neutral, we literally cannot use the chain that we are here to defend and protect. “Sorry,” wrote an account with the username DCinvestor in a sarcastic tone, imitating the EF.

“'EF uses the chain; actually our number one use case is getting rid of eth.' Really crazy,” commented another ethereum trader with the username eric.eth, adding that EF should stake the ETF and use DeFi to cover internal costs.

ethereum co-founder Vitalik Buterin came to EF's defense by responding to the criticism, stating the two key reasons why the foundation decides not to stake eth.

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Buterin cited regulatory concerns as the first reason. Considering ethereum is one of the largest crypto protocols by market cap, staking a significant amount of eth could attract unwanted regulatory scrutiny. Such actions could raise questions about whether ethereum counts as a security or not. Something that many crypto companies have struggled with over the years.

The second reason mentioned by Buterin relates to how staking eth would require the ethereum Foundation to “take a position on any future controversial hard forks.” In this case, Buterin is referring to a possible split within the ecosystem that could lead to one side of the community preferring one version of the blockchain over the other.

Therefore, if EF were to stake its own tokens using one blockchain instead of another, it would appear as if EF were endorsing that chain and making its position known.

Vitalik Buterin acknowledges that regulatory concerns have diminished over the years, although the second reason still remains.

“There are definitely ways to minimize it, and we've been exploring them recently,” he wrote.

Furthermore, he also <a target="_blank" rel="nofollow" href="https://x.com/VitalikButerin/status/1881303833751801906″ target=”_blank”>explained how withdrawing eth could end up taking longer compared to simply selling the tokens. This is usually due to the large number of validators also using the chain. Therefore, if the EF is the only entity withdrawing eth, it would take 2.6 days to complete.

However, if many participants withdrew simultaneously along with EF, it could take up to 58 days to complete. That is, if 20% of ethereum bettors withdraw at the same time.