Now that Ethereum has launched and is fast approaching its Homestead phase, over the past few months we at the Ethereum Foundation have finally had a chance to take a breather and plan our strategies with a longer-term view. From a development perspective, we have now begun in earnest the developing of Serenity, the next major revision of the Ethereum protocol that will include powerful software abstraction features, the Casper consensus algorithm, and hopefully some basic scaffolding that will allow development of scalability features over time with minimal disruption. POC1 has been released and POC2 will probably be released in about a month. In parallel to this, Martin Becze is actively exploring options for optimizing EVM using WebAssembly, and several groups are working on implementing various forms of advanced cryptography on top of EVM today.
However, as exciting as this work is, there is also a substantial amount of equally important, if somewhat less glamorous work that needs to be done on the backend of the backend, at the Ethereum Foundation itself, to make sure that the organization it can survive and ideally thrive long enough to implement the Ethereum vision to its fullest.
At the time of the last major update of this type, the main challenges of the Foundation were organizational and financial. Expenses were very high, peaking at over €400,000 per month on a mix of development, communications, administration and security audits. The ecosystem was flourishing rapidly, with various Ethereum-based companies either unveiling themselves after months of quiet development or coming on the scene only recently, a saving grace for the Foundation as it no longer needed to sponsor development of each layer of the ecosystem itself. , but nonetheless a transition that needed to be managed, to make sure that all relevant stakeholders continued to be included in the development process. Administrative inefficiencies, including a total of six entities in four jurisdictions, compounded our problems and at times it seemed like there was too much to handle.
It was at this point that we, under the leadership of our new CEO Ming Chan, began a process of streamlining our operations on multiple fronts, in order to prepare the Foundation for its long-term future.
End of an era, end of a series of challenges, beginning of a new era, beginning of another series…
On the non-administrative front, perhaps most prominent has been our efforts to increase the transparency of the research and development process, the main initiatives on that front being increased emphasis on the use of our gitter channels for discussion instead of Skype, as well as the EIP process for protocol updates; both have been very successful with much of the discussion on those channels and many EIPs being developed and discussed. We also actively review the state of our other internal and external forms of communication and media, including forums, documentation, and tutorials, and actively welcome community feedback on how best to improve them.
The biggest challenge of all, however, was clearly financial. Open source projects are often known for being underfunded, sometimes with very unfortunate results, and while the unique nature of public crypto-economic blockchains has provided and can continue to provide opportunities that simply aren’t available in most other circumstances, the problem persists and we decided that before we felt comfortable looking for ways to get more money, we should first aim to be more efficient with the money we already have. Therefore, it is here that the highest gains have been made in the last four months, and with very positive results.
On the development side, we made the decision to take a more focused approach and target primarily the core Ethereum software and specifically the Go client. This still includes much of the original Ethereum development plan, including thin clients (which are very advanced), a mobile wallet, and Mist, and we continue to support C++ and Python to a lesser extent, with a special emphasis on development tools (Solidity and Mix ), but other aspects of the ecosystem we are leaving to the community at large; As awesome as the idea behind Whisper is, it is currently not supported by the Foundation, although we are actively seeking partnerships and other mechanisms to help develop some of these additions. Our communications have been greatly simplified and now consist of a smaller team of people who work part-time but are more spread out across the globe.
Some of the biggest gains are in administrative costs. In the last four months, we have started a process of consolidating the legal entities through which the Foundation finances the development of Ethereum; Of the six entities we’ve had across Europe up to 2015, three have already essentially been dismantled and will soon begin the closure process. We also moved out of the house we had rented when we expected to have a large number of developers working full-time in Zug, and are now located in a smaller location in the city center that will save us an employee’s salary. value of monthly rent and public services; we have also closed our physical office in London and are actively exploring options to reduce rental costs in Berlin. With Ming present most of the time in Switzerland, we now have to rely much less on outside contractors for our needs there, saving us even more.
Someone else’s electric bill now…
In total, the Foundation’s monthly expenses have now more than halved from our 2015 peak of over 400,000 EUR per month, and currently amount to a monthly sum of approximately 175,000 EUR (~188,000 USD). . This roughly consists of:
- €22,000 per month for C++ development (~75% decrease)
- €65,000 per month for Go development (~10% reduction)
- 5,000 EUR per month for Python development (~50% reduction)
- 13,000 EUR per month for IT, hosting, build server maintenance, release coordination, etc.
- 6,000 EUR per month for communications (~85% reduction)
- 20,000 EUR per month for research (virtually unchanged)
- 40,000 EUR per month for senior administrative and executive staff, accounting, office management, legal and other (~50% decrease with more cuts likely soon)
The Foundation’s current assets include roughly 2,250,000 ETH, 500 BTC, and $100,000 in fiat currencies, giving us roughly a year to spare from this point, assuming both the ether price and our budget preferences remain unchanged. Some salaries are paid in ether; Along with this, we now also have an ongoing agreement with Bitcoin Suisse to convert the Foundation’s ether into fiat at a rate of CHF 5,000 per day to ensure continued liquidity (along with ~$650,000 in private sales to individuals and Business). These numbers reflect the actual holdings of the Foundation; almost all of the ether from the pre-mine genesis and developer buyout program has already been distributed to its rightful owners.
Over the next few months, we expect optimizations and cost savings to continue, and as our overhead is reduced, we will once again begin to scale up our efforts on multiple fronts. We will soon be adding Lisa Cheng to our part-time team for communications, and we will also begin to carefully increase our spending on research efforts to accelerate development of Serenity. At the same time, we are actively exploring various types of strategies to increase the Foundation’s gateway. Given the great level of interest in Ethereum that we have seen in North America, Europe and particularly Asia, we are confident that we will be able to find an approach that will ensure that development will continue not only beyond Serenity, but also to a massive Ethereum 2.0. scalable and beyond.
