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The ethereum Foundation (EF) is considering implementing a formal conflict of interest policy following backlash from two prominent developers who joined EigenLayer as advisors.
Executive Director x.com/AyaMiyagotchi/status/1793965259524653058″>Aya Miyaguchi addressed the issue in a social media post, emphasizing the importance of maintaining credible neutrality within the organization. He said the foundation shares the community's concerns and is committed to maintaining trust.
Miyaguchi said:
“It is clear that relying on culture and individual judgment has not been enough, and we have been working on a formal policy to address this issue for some time. We will accelerate this work and will share an update soon.”
Controversy
The controversy began on May 18 when prominent cryptocurrency trader Jordan Fish, known as Cobie, publicly questioned ethereum co-founder Vitalik Buterin about the ethics of EF developers receiving significant financial incentives from projects built on the network.
Cobie's tweet specifically used EigenLayer as an example and sparked widespread discussion on social media about potential conflicts of interest. He wrote:
“What do you think about ethereum Foundation developers or principal researchers taking life-changing packages of projects built on ethereum to become 'advisors', when those projects may have conflicting incentives with ethereum, either now or in the future? For example, purely theoretically, of course, let's say EigenLayer.”
Following Cobie's tweet, ethereum Foundation researcher Justin Drake revealed his advisory role at EigenLayer on May 19. Drake revealed that he received a substantial incentive in Eigen tokens, which are estimated to be worth millions of dollars over a three-year vesting period.
The disclosure raised concerns about transparency and potential conflicts of interest between EigenLayer and the ethereum Foundation. Drake also stated that the information had been public since May 3 and that the timing of the disclosure with Cobie's tweet was a coincidence.
On May 21, another ethereum Foundation researcher, Dankrad Feist, also revealed his advisory role at EigenLayer. Feist, known for his work on danksharding, confirmed that he had also received a significant allocation of EIGEN tokens and assured the community that his advisory role would not influence his positions on the development of EigenLayer.
Conflict of interest concerns
The disclosures have raised questions about potential conflicts of interest, especially given the systemic risks that EigenLayer could pose to ethereum. EigenLayer is a platform that allows users to deposit and “re-stake” Ether from various liquid staking tokens to secure third-party networks or validated services.
Many blockchain experts have expressed concerns about potential centralization and the additional burden placed on bettors when running recovery services.
Drake assured the community that he would reinvest or donate all profits to worthy projects within the ethereum ecosystem and pledged to end advice if EigenLayer's direction conflicted with ethereum's interests.
Feist, in his disclosure, emphasized that he would take contrary views on EigenLayer to focus on risks and decentralization. He wrote:
“I take this position personally, without representing the ethereum Foundation and focusing on risks and decentralization. I receive a significant amount of tokens from this position. I don't think they will change or influence my positions on how the core protocol should be developed, but I think the community needs to know so they can hold me accountable.”
The ethereum Foundation's decision to formalize a conflict of interest policy marks an important step in addressing community concerns and maintaining trust within the ecosystem. The foundation is expected to provide more updates on the policy soon.