This week, two Ethereum Foundation researchers (Justin Drake and Dankrad Feist) disclosed that they have become advisors to the Eigenlayer Foundation.

The credible neutrality of the Ethereum Foundation has been compromised by this action. Below, I’ll make the argument that a credible commitment from the Ethereum Foundation towards dissolving the Foundation in the next few years may be the only path forward.

Context

The Ethereum Foundation has a set of stated principles:

  • ‘We attempt to subtract our power and resist the natural tendency of organizations to grow and accumulate power.’

  • ‘Whenever possible, we remove ourselves from the equation, so that Ethereum flourishes with the support of a broad community of infinite gardeners, not just the EF.’

  • ‘We do not try to control or force the natural processes of the ecosystem, but we do try to help the community preserve its values, and in doing so help Ethereum to maintain its soul.’

If your first thought when reading this blog post’s title was ‘dissolving the Ethereum Foundation is a ridiculous notion’, I have a few questions for you:

  • Is the Ethereum Foundation today abiding by these stated principles?

  • Is the Ethereum Foundation today genuinely credibly-neutral?

  • Can we reduce the dependence and influence of the Ethereum Foundation, whether this year or next year or in the next decade?

  • If not, why not?

If we want Ethereum to be the world’s computer, or the global settlement layer, or whatever your favorite phrase for Ethereum’s 100 year vision is, we need to begin to release ourselves of the power and influence that the EF maintains in the ecosystem, and we need to allow the ecosystem to drive Ethereum forward for the next century.

Intellectual honesty is a core value of mine.

Credible neutrality is a core value of Ethereum’s.

In this case, both of these values have been infringed upon.

Let me just present a few snippets from the disclosures of these 2 researchers (emphasis added is mine):

The advisorship comes with a significant EIGEN token incentive which could easily be worth more than the combined value of all my other assets (mostly ETH). We’re talking millions of dollars of tokens vesting over 3 years. 2) I pledge to reinject all advisorship proceeds towards worthy projects within the Ethereum ecosystem

-Justin Drake

I do receive a significant amount of tokens from this position. I do not believe that they will change or influence my positions on how the core protocol should be developed, but I believe that the community should know about this, so that they can keep me accountable. I think Eigenlayer will be a major benefit to Ethereum, if it is done by someone with high integrity. I trust the current leaders are intending to do that, and I am planning to hold them accountable for it.

-Dankrad Feist

In both of these disclosures, the researchers describe a huge economic incentive that they are receiving. I respect that they have made this economic incentive explicit, although I wonder whether they would have made this disclosure if not for Cobie’s original tweet and ongoing backlash from the ‘social layer’.

However, in both of these disclosures, the researchers - who are clearly well-versed in game theory and economic incentives, given their body of work - claim that they have the discipline to avoid having their positions influenced.

Economic incentives are quite literally the single most important force-driving behavior in this industry and in all of human behavior.

How ridiculous is the notion that these 2 specific researchers are somehow immune from these incredibly powerful incentives?

I truly believe that Dankrad and Justin, in their heart of hearts, think that they are stronger than the economic incentives. I don’t know them personally, but by every account, they seem to be very nice people. I very much doubt that they are greedy or malicious individuals, and I don’t mean to imply that here at all. It is possible that maybe they are just the strongest, most-disciplined people in the world.

But what I can’t understand is how they could believe that the credible neutrality of Ethereum itself wouldn’t be compromised by these advisory roles.

I’m sympathetic to the idea that advisory shares could work IF the advisory was disclosed immediately (rather than after public backlash) and IF the intent was stated publicly and IF the proceeds were also distributed in some part to organizations making Ethereum more robust… however, that’s not how this all played out. Instead, it played out in a way that shows meaningful corruption of the ecosystem’s core values.

Credible neutrality

Which brings me to the Ethereum Foundation, and the concept of credible neutrality.

Vitalik has previously referred to credible neutrality as a guiding principle (emphasis added is mine):

when building mechanisms that decide high-stakes outcomes, it’s very important for those mechanisms to be credibly neutral.

Essentially, a mechanism is credibly neutral if just by looking at the mechanism’s design, it is easy to see that the mechanism does not discriminate for or against any specific people…

That is, it is not just enough for a mechanism to not be designed to favor specific people or outcomes over others; it’s also crucially important for a mechanism to be able to convince a large and diverse group of people that the mechanism at least makes that basic effort to be fair.

Here is where these two EF researchers have failed. Despite their pleas to the contrary, it’s easy to see that these relationships with Eigenlayer have compromised their ability (and much more importantly, the Ethereum Foundation’s ability) to remain credibly neutral.

A few examples that demonstrate where credible neutrality has been compromised:

  • March 2023 (just as Eigenlayer appears to have approached Justin about advisory, per his own timeline) - Justin implicitly proposes Eigenlayer specifically as a possible based rollups solution.

  • July 2023 - The Bankless ‘Restaking Alignment’ podcast, where both Dankrad and Justin appear to ‘debate restaking’.

  • December 2023 - Justin Drake’s talk at the Restaking Summit(sponsored by Eigenlayer! Posted on Youtube by Eigenlayer!) where he promises to ‘flesh out some of the incentive distortions that restaking brings to the table’.

  • April 2024 - The Ethereum Sequencing and Preconfirmation Calls, where the EF (represented by Justin) fund various groups to do research on L2 preconfirmations… with re-staking as a soft requirement.

These are not just random, low-level Ethereum Foundation employees. For better or for worse, these are employees that speak for the EF in public discourse and meaningfully influence protocol decisions. Don’t take my word for it - check out what the team lead of Geth (the most widely-adopted Ethereum client) has to say about their influence.

And of course, the significance of Eigenlayer in this whole situation is important. Eigenlayer is not merely an application on top of Ethereum - it has the potential to meaningfully influence everything from protocol economics to the integrity of Proof of Stake consensus itself (as described by Justin in the ‘Restaking Alignment’ podcast above, which appears to have been before he received advisory shares from Eigenlayer).

A call to action

I love Ethereum. Ethereum is the only thing that keeps me in this industry. I write this post with the hope that I can play one small part in making Ethereum the foundational infrastructure for the next century of human progress.

The EF has done incredible things, from funding PSE to Devcon to the Summer of Protocols to a million other projects. Some of my favorite people in crypto work at the EF, and it would be impossible to say enough good things about the EF’s work over the last decade. I truly express my gratitude to the people who have spent the last 10 years working on Ethereum and making it what it is today, including Dankrad and Justin, who have had no small part in making Ethereum great.

But it’s time to follow the EF’s guiding philosophy of long term thinking, subtraction, and stewardship of values.

I want to be clear and tangible with my call-to-action here. In my eyes, a positive outcome would be:

  • For the Ethereum Foundation to commit to a multi-year timeline to ossify the protocol and dissolve the Foundation, or

  • If the EF continues to exist, for the EF to develop a Constitution that holds the organization to certain principles that it cannot break. Allowing its key decision makers to take massive advisory shares is equivalent to Supreme Court Justices having a massive equity stake in the companies on which they adjudicate.

I’m not sure what the EF will do about the treasury (burn it?), or how All Core Devs continues to operate (Protocol Guild?), or any of the answers to the 100 open questions about the exact mechanisms that will need to be followed to dissolve the EF. Hopefully this is the start of a 5 or 10-year timeline and ongoing discourse towards dissolving the Ethereum Foundation, rather than a request to immediately dissolve.

But It’s clear to me that the only way to ‘help Ethereum maintain its soul’ and ‘resist the natural tendency of organizations to grow and accumulate power’ is to disband the Ethereum Foundation and allow credible neutrality to flourish again.

Thank you to several people who have provided thoughts and feedback for this post. I will avoid calling you out by name explicitly for your own sake, but you know who you are and I greatly appreciate it.

All views are my own and do not reflect the opinion of anyone else.