Key Points
- Vitalik Buterin explains why the Ethereum Foundation avoids staking ETH.
- He mentions potential alternatives to staking ETH while maintaining neutrality.
- Community urges the Foundation to stake ETH to fund operations sustainably.
- The Foundation uses sales to finance vital network developments and research.
Ethereum Foundation ETH sales have sparked lively debate in the crypto community, with many asking why the Foundation chooses to sell its ETH rather than stake it.
Vitalik Buterin, the Ethereum co-founder, recently defended this approach, explaining that the Foundation’s decision to sell ETH instead of staking aligns with its commitment to neutrality. By avoiding staking, the Foundation steers clear of taking sides in potential network upgrades or hard forks, which can divide the community.
This move has raised questions since staking could yield steady rewards, which the Foundation could use to fund its operations. However, Buterin clarified that the Foundation is exploring indirect ways to leverage staking through grants and partnerships that let others stake ETH on its behalf.
Vitalik Buterin defends #Ethereum Foundation over consistent $ETH selling. pic.twitter.com/PYIbQVFS48
— Altcoin Daily (@AltcoinDailyio) October 27, 2024
Ethereum Foundation ETH Sales and the Non-Staking Approach
The Foundation’s stance on ETH sales versus staking has raised questions. Many in the crypto world wonder why it doesn’t simply stake its holdings and earn rewards to support its projects.
According to Buterin, staking could position the Foundation on one side of potential network conflicts, such as hard forks or contentious updates.
By selling ETH, the Foundation avoids taking any official stance in network upgrades or hard forks, which could impact Ethereum’s direction. Instead of staking directly, Buterin shared that the Foundation is considering indirect staking strategies.
One approach includes issuing grants in staked ETH, allowing the grantee to stake the ETH and retain staking rewards. Alternatively, the Foundation may delegate ETH staking responsibilities to independent organizations that stake on its behalf, allowing it to keep a neutral position.
“One interesting idea around this is giving some grants in the form of ‘you can stake our ETH, choose how as long as it’s ethical, and keep the upside,’” Buterin said in a recent post.
With 271,000 ETH holdings, valued at over $673 million, the Foundation’s non-staking strategy emphasizes neutrality over the potential income from staking. The potential return from staking could reach $20.8 million annually, a fact that hasn’t escaped the attention of the crypto community.
Funding Ethereum’s Growth Through ETH Sales
The proceeds from these ETH sales contribute to Ethereum’s broader ecosystem growth, supporting developers, researchers, and innovation.
Blockchain analytics from ScopeScan recently revealed that the Foundation sold 4,066 ETH—worth around $11.24 million—this year alone through CoWSwap. The revenue generated helps fund key projects, such as Ethereum’s shift to Proof-of-Stake, enhanced transaction speeds, and reduced network fees.
Buterin defended the Foundation’s ETH sales, explaining that funds support major upgrades that keep Ethereum competitive and reliable. The Foundation has also sponsored privacy-centric zero-knowledge technologies and account abstraction for better security.
These innovations are part of Ethereum’s strategic roadmap, made possible by ongoing reinvestment of ETH sale proceeds.
The Foundation also actively supports local Ethereum events globally, strengthening Ethereum’s community and bolstering the network’s security. Buterin urged the crypto community to recognize these contributions and trust that the Foundation’s ETH sales strategy prioritizes Ethereum’s long-term development.
