Ethereum Is Facing A Critical Funding Gap, Says Ex-EF Member | Markets Outlook

**Trent Van Epps** (0:00)
What Eat the Asset needs the most is a fresh, new, confident story to be told about it. And part of the disconnect is people not understanding the relationship between this burgeoning on-chain economy, the EVM being the underpinning of effectively most of the on-chain world. And I think it just needs a talented storyteller to point these things out, weave them together for context.

**Jennifer Sanasie** (0:34)
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**Trent Van Epps** (1:03)
Thank you for having me, Jen.

**Jennifer Sanasie** (1:05)
All right, let's talk about what's going on over at the Ethereum Foundation. A lot of news coming out of the Ethereum network. I know you were there for five years and recently stepped away. Talk to us a little bit about what went into that decision.

**Trent Van Epps** (1:24)
The EF, as everybody probably is somewhat aware, is the key coordinator of or has been for many years, the key coordinator of a lot of the network upgrades, the stewardship of the Ethereum network.
It has developed this organizational and operational philosophy called subtraction, which is they want to push out legitimacy, push out power into the broader ecosystem. And this is an intentional decision. And they've made increasingly greater and greater steps to do this over the years. And earlier this year, it became clear that this was going to happen on a more significant scale. And this was the right time for me to step away and start to think about what do, what new institutions are necessary in the Ethereum ecosystem. And how can this transition actually be successfully managed?

**Jennifer Sanasie** (2:17)
And subtraction is essentially like a progressive decentralization, right?

**Trent Van Epps** (2:22)
Yeah, yeah. You know, they've, Aya and Vitalik have written about it and spoken about it over the years. But it's just this idea of the EF is very concerned with not accruing power to itself and pushing that out into the ecosystem. And the idea is that in the same way that the network is decentralized, where you have many different nodes running consensus processes, you can also have different organizations and different institutions running on the political and social layer of bootstrapping the network, engaging with stakeholders, things like that.

**Jennifer Sanasie** (2:53)
I mentioned that there's been a lot of news coming out of the Ethereum ecosystem. We recently learned that there is a 20 percent reduction in workforce, executives stepping away from the Ethereum Foundation, investors kind of looking at this news, wondering what the future of Ethereum looks like. I know in an article that you published on X recently, you mentioned that Ethereum could face a funding crisis in the next three to nine months. Talk to us a little bit about what that practically means and what it looks like.

**Trent Van Epps** (3:24)
Sure. Yeah, practically is the perfect word here. So because the EF has this philosophy of, again, subtraction and transition and succession, it has used its treasury to fund important shared resources like the clients, all the network upgrades, the move from proof of work to proof of stake, things like this, and practically, there's a limit on how much resources it can actually put towards this. The treasury is from the origin of the network, from the genesis of the network. This treasury has slowly been put towards productive uses and this is going away.
So the big question is, okay, who's actually going to step in to fill the gap as the treasury declines?
That doesn't necessarily mean that there are fewer needs or fewer things that need to be funded. In fact, the level of funding needed for core development is relatively stable. I would estimate around 30 million per year, which if you think about the 200 billion market cap, the attributes that the network offers in terms of settlement, trillions of dollars of stable coin settlement, and just the robust guarantees of reliability, 30 million dollars a year isn't that significant in the grand scheme of things. But as the EF steps away, as it moves into a backseat role, the funding question is still there. If we want to maintain these critical characteristics that the Ethereum network has, again, for reliability, 100 percent uptime, this is what the broader market understands Ethereum as being good at. But these features are only maintained by consistent and stable funding. So I wanted to just call out to the broader community and say, look, this challenge is here and we need to rise to meet the moment.