Searching for the Ethereum Foundation's Remaining Cash

**David Canellis** (0:00)
Welcome back to The Breakdown, everybody. I'm your host David Canellis, as always. Today is going to be a super quick one, because it is sweltering hot in Europe right now. It's in the early 90s in Fahrenheit, where I am right now, which is mid 30s, somewhere around there in Celsius. And The Breakdown Studio is equally hot right now.
So we're just going to keep it brief. But today we're looking at the Ethereum Foundation shakeup. It continues. We're going to look at the new mandate, the new organizational structure. And we're also going to look at the financials of the Ethereum Foundation as far as we can piece them together, at least. Because as we might already know, it's not the most transparent organization when it comes to its financials. But if we combine what we can see on chain with its history of financial disclosures over the past couple of years, then we should be able to get a decent picture on what the financial health looks like of the EF moving forward into its next phase. So, without further ado, enough jibba jabba and so on. This is The Breakdown. Let's get to it.
Nothing is said on The Breakdown as a recommendation to buy or sell securities or tokens. This podcast is for informational purposes only, and any views expressed by anyone on the show are opinions, not financial advice. Hosts and guests may hold positions in the company's funds or projects discussed. Okay, so before I jump into this, I do just want to highlight that, you know, unpacking the organizational structure of non-profit foundations is not exactly compelling content.
I mean, it's, you have to be quite administration-brained, you have to be quite administrative-brained in order to really get a kick out of, you know, unpacking the, the pros and cons of how non-profits are structured, and that's even within the crypto context as well. It is quite dry. But if I was to style the Ethereum Foundation's reboot, the new structure, it is again a reinforcement of its cypherpunk values. And it is really going deep on the cypherpunk maximalism, which I have to say is really cool. I really do appreciate that quite a lot. We know that the crypto space has been institutionalized. We know the crypto space has been overrun, for want of a better term, of corporations, highly well-funded for-profit businesses and so on. And it should be. I mean, crypto is a technology. Anybody can use it. And if crypto is a Trojan horse, which many of us do hold dear to our hearts, the crypto, even outside of the Bitcoin context, could be a Trojan horse of sorts that changes TradFi, that changes humanity. And in the case of Ethereum, at least, it changes humanity for the better over the next 100 years or even thousands of years in Vitalik's best case scenario. So, with that said, I will do my best to point out exactly which parts of this new mandate are really expressing its cypherpunk maximalism once again, and to just kind of bring some excitement to this whole restructure. And I mean, so to give context, I think we know that many, many people, I mean, I think it's over a dozen, it might be close to two dozen people, at least prominent figures within the Ethereum Foundation, have left over the past couple of months, over the past few months. And that is all to do with its new mandate, its new positioning, and its new lean structure that Vitalik is trying to piece together, and the other board members too. So this came out yesterday, on Tuesday, June 23, the EF's new structure. Today, the EF is changing shape, concluding a months long process of reorganization as part of the implementation of the mandate and the treasury management policy. We come out of this process with the structure, activities, and people necessary for execution on the critical tasks ahead of us, but also with 54 fewer colleagues, which is roughly 20% of the EF, many of whom will be finding ways to contribute to Ethereum from outside the EF in the coming weeks. So we're going to cover that briefly as well. So it's a downsizing of the Ethereum Foundation. And I mean, you know, a 20% reduction in workforce is of course quite significant, but it's a non-profit. I know that we have jumbled up all of these terms, and it was a lot of regulatory arbitrage to avoid the SEC, that we would have this foundation as a front, and then you will also have the DAO as part of that, in order to just create some distance between the software program as the business side of whatever protocol that might be and the regulators. What that has caused is, I mean, I think we're programmed now in crypto to consider a foundation as a pseudo business, or at least one that operates with the intention to boost the business and profit making footprint of the protocol as a whole, even within a non-profit structure. But the Ethereum Foundation, I would say is probably the quintessential example of a non-profit in the traditional sense that crypto has. So if it loses 20% of the workforce, does a non-profit have a workforce or does it just have contributors?