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Ethereum Foundation is Under Pressure After Departures

gm, Defiers!

It was a rough day to be an Ethereum bull.

The world's second-largest blockchain by market cap is no stranger to existential hand-wringing, but Thursday brought an unusual convergence of bearish signals: Institutions and KOLs cashing out, high-profile EF departures, project shutdowns, and a growing chorus of voices questioning whether Ethereum has the organizational muscle to compete in an increasingly crowded L1 landscape.

Maybe fueling the hand-wringing is the market itself. ETH is trading at roughly $2,136, well below its 2025 cycle highs and trailing both Bitcoin and Solana year-to-date.

At the Ethereum Foundation, the exodus is accelerating. At least eight senior researchers and leaders have left this year, with five departures in May alone. The instability coincided with a leadership transition and a change in focus by the new administration. Former EF researcher Dankrad Feist published a proposal this week calling for an entirely new institution with at least $1 billion in initial funding, led by someone explicitly tasked with fighting for Ethereum's competitive position. The argument, in short: the EF is built to protect the protocol but nobody is protecting the price.

On the same day, three Ethereum-adjacent infrastructure projects announced they were shutting down. Syndicate Labs, Everclear, and ZERO Network, collectively representing tens of millions in venture funding, all cited versions of the same problem: the rollup and cross-chain infrastructure thesis that animated the last cycle has hit a commercialization wall. Then there's the institutional signal. Harvard Management Company cut its BlackRock Ethereum ETF position entirely in Q1.

And lastly, David Hoffman, co-host of Bankless, an influential Ethereum-focused media brands, disclosed that he has sold all of his ETH. This from a host whose show helped define the ultrasound money narrative that gave Ethereum its cultural edge during the last bull run. Around the same time, Bankless laid off at least four editorial staff members.

None of this means Ethereum is broken. The underlying developer activity, stablecoin settlement volume, total-value locked and institutional infrastructure being built on top of Ethereum still dwarfs most competitors. But that position is far from guaranteed and competition is heating up. In that context, narrative momentum matters and right now, Ethereum's is under serious pressure.

Join us to discuss what’s next for ETH after the EF exodus LIVE at 11am tomorrow, May 22!

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BLOCKCHAINS

EF Exodus Fuels Calls for New Price-Focused Ethereum Organization

At least eight senior Ethereum Foundation researchers and leaders have departed this year, with five exits in May alone. Former EF researcher Dankrad Feist published a proposal calling for a new institution with at least $1 billion in initial funding, permanently funded through staking revenue, led by "someone willing to fight for Ethereum's competitive position." Other prominent crypto personalities also supported that idea. ETH was trading at ~$2,136, well below 2025 cycle highs and trailing both BTC and SOL year-to-date.

Why this matters: Feist's proposal is a request for Ethereum's missing commercial layer — an institution explicitly accountable to ETH-the-asset rather than Ethereum-the-protocol. The hard part isn't funding; it's whether a price-focused org can exist without splitting Ethereum's legitimacy story in two.

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Blockchain Projects Syndicate, ZERO and Everclear Wind Down on the Same Day

Three blockchain-infrastructure projects announced wind-downs on Thursday. Syndicate Labs (a16z-backed, $27M raised) cited a fundamental shift away from EVM rollups. Everclear (formerly Connext) reached $500M in monthly volume but couldn't convert it to revenue before runway ran out. ZERO Network, a gasless Ethereum L2 built by Zerion, is shutting down and redirecting its team back to core wallet products.

Why this matters: Three independent data points confirming the same conclusion: rollup-and-bridge infrastructure has hit the commercialization wall. Cross-chain and rollup software is hard to charge for when alternatives are open-source and subsidized. Survivors will be projects with real distribution or vertically-integrated economics.

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Federal Reserve Proposes Limited Master Accounts Framework for Crypto Firms

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Why this matters: The first concrete US proposal addressing crypto debanking since Custodia's 2023 denial and the Silvergate/Signature wind-downs. The key question is whether stablecoin issuers like Circle or Paxos qualify. If so, settling USDC redemptions directly through FedNow would materially reduce correspondent banking costs.

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EUR-Denominated Stablecoins Surge 12-Fold as European Banks Scale MiCA-Compliant Assets

EUR stablecoins processed at retail VASPs have grown 12-fold over 15 months to $777 million in transaction volume, per Fireblocks' State of Stablecoins 2025 report, as European banks move from pilots to production deployments under MiCA.

Why this matters: USD stablecoins sit at ~$260B versus sub-$1B for EUR — a 300x gap — but the growth rate is the signal. MiCA gives issuers regulatory certainty the US still lacks, which is why Circle and Paxos issue EUR products offshore. If Société Générale and Banking Circle can scale without regulatory whiplash, institutional EUR stablecoin adoption could move faster than the USD version did in 2020–2022.

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MARKETS

Harvard Endowment Cuts Bitcoin ETF Holdings by 43%, Exits Ethereum Fund Entirely

Harvard Management Company cut its BlackRock Bitcoin ETF (IBIT) position by ~43% in Q1 2026 and fully exited BlackRock's Ethereum ETF. Meanwhile, Abu Dhabi's Mubadala increased its IBIT stake 16% to ~$566 million in the same period.

Why this matters: The divergence captures two distinct allocator cycles: endowments (Harvard, Yale, Princeton) de-risking after first-cycle ETF exposure, while sovereign wealth funds continue treating IBIT as a strategic reserve diversifier. Net IBIT flows remained positive through Q1 — Mubadala-type buyers are absorbing the Harvard-type sellers.

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