Ethereum Foundation Reveals Conflict Of Interest Policy

The Ethereum Foundation has made its recently implemented conflict of interest policy public.

On Nov. 8, the Ethereum Foundation (EF), a non-profit entity dedicated to supporting the development of the core Ethereum protocol and related technologies, published its 2024 report. The document includes the foundation’s long-awaited conflict of interest report.

The policy requires that employees and contractors inform EF of investments worth more than $500,000 in assets other than ETH, employment at projects outside of EF worth more than $25,000 annually, angel investments worth more than $400,000 annually of $100,000 per cheque, and projects cofounded by EF members.

EF employees are also forbidden from taking on external work in exchange for illiquid assets with an unknown market value, although “rare exceptions” can be made.

Disclosures must be discussed with internal groups comprising EF membership, an employee’s EF team lead, and EF legal.

In May, Aya Miyaguchi, the executive director of EF, revealed the policy was under development after EF researchers Justin Drake and Dankrad Feist announced lucrative advisory positions at EigenLayer, the pioneering restaking protocol.

Last week, Drake and Feist announced they had stood down from their positions at EigenLayer after facing community backlash.

Ethereum Foundation spending

The report also included breakdowns of EF’s spending in 2022 and 2023.

In 2022, 36.2% of the foundation’s $105.4 million budget was spent internally with the remaining $67.2 million supporting external grants and research.

Roughly $32 million was spent on Layer 1 research and development (R&D), while “new institutions” dedicated to supporting Ethereum received $28.6 million, community development was earmarked $19.5 million, and internal operations accounted for $8.5 million. Efforts to improve Ethereum as a developer platform cost $8.3 million, applied research into zero-knowledge technologies made up $7.6 million, and $800,000 was spent on R&D into Layer 2 solutions.

In 2023, EF spent $124.9 million, 37.2% of which funded internal operations. New institutions were the largest spend with $47.4 million, followed by Layer 1 R&D with $34.7 million, community development with $16.9 million, applied zero-knowledge with $14.8 million, internal operations, with $10.5 million, developer platform initiatives with $8.7 million, and Layer 2 R&D with $1.9 million.

EF’s treasury is currently worth $970.2 million, 81.3% of which is cryptocurrency — with 99.5% taking the form of ETH.

The report comes as the foundation’s Ether sales have persisted as a controversial subject, inflamed by a $94 million transfer to Kraken, a centralized exchange, in August. The foundation said the transfer related to its annual budget and the funds would be sold off over time.

Protocol Guild

Protocol Guild, a collective of Ethereum core contributors, provides support to 181 developers representing roughly 30 projects within the Ethereum ecosystem. Protocol Guild has distributed more than $20 million to contributors since launching in May 2022.

“Protocol Guild binds everyone together into a collective organization, which reduces the concerns associated with isolated individuals receiving large sums of funding from projects close to the Ethereum core protocol — where it's especially important that credible neutrality is maintained for the projects building on top of it,” Trent Van Epps, an Ethereum Foundation employee and Protocol Guild organizer, told The Defiant.