EF has no dreams

24-05-24 10:36
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In the past few days, the reversal news of the Ethereum ETF seems to have completely changed the market's judgment on its fundamentals. Analysts who had been pessimistic before made a 180-degree turn in one day. With the official approval of the ETF, ETH almost broke through the $4,000 mark this morning, but behind the price climax, the Ethereum Foundation has come to a crossroads.

Since last year's Montenegro EDCON, the industry's dissatisfaction with the Ethereum Foundation has begun to manifest. The organization seems to have entered a mid-life crisis, and has fallen into trouble in terms of structure, efficiency, and culture, and with the re-emergence of Solana, the decline is fully revealed. After ETH officially became a world asset, the Ethereum Foundation seems to have become the biggest burden of this ecosystem.

Parasitic Ethereum

On May 21, Justin Drake and Dankrad Feist, two well-known researchers of the Ethereum Foundation (EF), disclosed that they had become consultants of EigenLayer and would receive EIGEN tokens as compensation, which "may exceed their current wealth". In the eyes of the community, this "wanting both" behavior is really ugly, and some people even joked that EF researchers "are 're-staking' themselves."

Related reading: Ethereum Foundation caught in internal and external troubles: researchers and engineers debate fiercely, members serving as EigenLayer consultants may have conflicts of interest

This situation is no longer an isolated case. In today's Ethereum ecosystem, EF is more like a demander, exporting "ideological dollars" to the ecosystem through its "church" identity, while EF members gain both fame and fortune in this environment.

EF "Congressionalization"

In the debate about "EigenLayer consultants", the most discussed issue is whether EF researchers serving as project consultants will affect their neutrality.

Although both researchers claimed that they participated in the advisory role in their personal capacity and would be "ready to end" their advisory positions if EigenLayer went against the interests of Ethereum, the community obviously did not buy it. When the potential income "may exceed the total of one's existing wealth", it is difficult for a person to guarantee that he will treat money as dirt.

The day before the disclosure of Eigen's consultant status, Dankrad Feist was still arguing fiercely with other researchers on the MEV issue, and eventually forced Vitalik to mediate. As the "Ethereum guide" who proposed Danksharding, Dankrad obviously has a significant voice in EF. From another perspective, EigenLayer is more like spending money to buy a lobbyist at EF.

Today's EF is like the "Congress" of Ethereum. The EIP written by researchers can directly change the direction and pattern of Ethereum and affect hundreds of millions of dollars of ecological industries. With the continuous growth of the number and size of ecological participants, EIP involves more and more interests. Every participant hopes that he can get "special care" in the upgrade like L2, but it is impossible for everyone to be consistent with the interests of Ethereum. Therefore, EF researchers have become "parliamentarians" that must be won over in the eyes of capital.

In fact, it is an open secret in the industry that EF researchers, whether they have resigned or are still in office, have participated in projects as consultants or in other forms in their personal capacity. For projects, in order to gain ecological legitimacy for themselves, they must try their best to establish a good relationship with EF in various ways. At this time, if there is someone close to EF around them, it will be much more convenient to do things on and off the stage. For VCs, establishing a good relationship with EF is a convenient channel to get in touch with high-quality investment targets earlier. With the projects recommended by EF researchers, it is not only easier to get shares, but also to have a layer of insurance in advance in terms of legitimacy.

Whether they like it or not, there must be various hunting capitals around EF researchers, either entrusting them with advisory positions or directly sponsoring their personal research, and the researchers themselves do not seem to be averse to this. Against the background of the increasingly obvious modularization trend of EigenDA, Celestia, etc., this situation may be manifested in a faster and more obvious way. More teams will have their own parliamentary teams in EF, and EF itself will also embark on the road of "parliamentarization" due to the unbundling of interests of all parties.

Spiritual Victory

After the FTX crash, Anatoly, as the CEO of Solana Labs, personally talked to the ecological projects under development, such as Backpack, Jito, and Tensor. These projects lost a lot of Runway in the FTX incident. Anatoly persuaded these teams to stay one by one and encouraged them to speed up development. Labs and the Foundation provided technical support to these teams as much as possible.

In the Solana ecosystem, Solana Labs and the Foundation seem to do a lot of things themselves, and many ecological narratives cannot be separated from the team's boost. Anatoly frequently appears on social platforms or podcasts, and even personally calls out ecological developer projects and meme coins. The foundation led by Lily Liu connects with various large and small projects in the ecosystem both on and off the stage. From the outside world's perspective, the Solana ecosystem has always been very "united."

And this is unlikely to happen for Ethereum today. Unlike most public chains, Ethereum does not have "Ethereum Labs", so EF has become the only entity that has exclusive control over the ecosystem. However, as a "neutral organization", it is difficult for EF to personally participate in many things in the ecosystem, which makes EF more of a "rule by inaction" image, and also makes EF seem powerless when competing with the Solana team.

In comparison, EF seems less willing to dirty its hands. After Uniswap, EF has become an academic institution that sits and talks about theories. Most of the more than 300 members who receive ETH allowances are doing research on paper. Therefore, in addition to EIP, EF cannot bring more value to Ethereum. On the contrary, in terms of ecological development, the existence of EF has constrained Ethereum with many ideologies.

In the past year, the Ethereum circle did not talk about innovation or application scenarios, but talked a lot about "legitimacy". This concept proposed by Vitalik in 2021, although more related to public goods, in the eyes of most people, it refers to the direct relationship with the foundation. In essence, this is not a misunderstanding. EF has the absolute right to interpret the concept of "orthodoxy", which also includes what is a good public good.

Today, almost all large-scale projects on Ethereum have undergone this kind of orthodoxy. If a small team without background strength wants to grow and develop, it must first pass the ideological test. Innovation is not the primary task, and singing the main theme is the key. So whether it is account abstraction or any other concept, the industry has basically been EF pointing to hit wherever it points in the past year. The project party does the dirty work, VC pays for the dream, and the two groups of people compete to carry the sedan chair for EF and run with the ecosystem, while EF researchers chat about longevity with Vitalik on the beach of Zuzalu.

Cultural Poisoning

Two days ago, EF researchers quarreled over the MEV issue on social media. Vitalik stepped in to mediate, saying that he was proud of the open and free culture of the Ethereum ecosystem. "Ethereum does not have any culture that tries to stop people from expressing their ideas, even if they have very negative feelings about the main things in the protocol or ecosystem."

In the Ethereum community, you can indeed express different opinions, but what's interesting is that these opinions tend to focus on purely technical discussions. You rarely see EF researchers arguing fiercely about the direction, governance, and culture of Ethereum. Today's Ethereum world seems to be missing a lot of things. Its culture is like poisoning, and it has almost lost its ability to think critically on certain issues.

Vitalik becomes hard currency

At EDCON in April last year, the "DeBox incident" was one of the most popular topics. After the team members took a photo with Zuzalu and Vitalik, the project immediately attracted a lot of attention. Many Chinese teams followed suit and chased Vitalik in Montenegro. Throughout EDCON, thousands of people were crowded in a small campus. After discovering that Vitalik was hiding in a large villa by the sea, they all rushed to Zuzalu, met several faces in the core circle, took a photo of Vitalik from a distance, and then came back to write "Zuzalu flashes the city's spiritual baptism."

In the eyes of the market, Vitalik is the orthodoxy. As long as it is related to Vitalik, the market recognizes it, and this recognition extends to all aspects of the ecosystem. After Montenegro, the topic of "orthodoxy" fermented in the Chinese community. Everyone realized that they were too eager to get the care of the mainstream of Ethereum, but this core circle was so far away from us that we couldn't squeeze in.

As the embodiment of the interpretation of orthodoxy in the Ethereum ecosystem, the way EF maintains its authority and recognition is to follow Vitalik's footsteps closely. In the past year, Vitalik's articles are still the most discussed content in EF and the Ethereum community. From the internal community to the "mouthpiece" Bankless, there are few voices against Vitalik. Some people who have had in-depth exchanges with EF members even reported that most of the members around Vitalik are flattering, and it is difficult for him to hear the real thoughts of the community. Of course, the authenticity of this statement remains to be confirmed.

The most classic case is Scroll. During the period when L2 narrative prevailed, it rose from an inconspicuous "Chinese dog" to a mainstream L2 worth $1 billion, such as Starktnet and zkSync. The reason for this is that an email written by the founder to EF received a reply from Vitalik. The same is true at the product level. Although Farcaster has received huge financing from Multicoin and even a16z, it has always been a niche product before Vitalik joined. But now, it is difficult for you to see EF researchers updating their social dynamics on X in large numbers.

The market needs Vitalik's care, and EF needs blood transfusion from the market, so EF surrounded Vitalik and let the market revolve around itself. In the end, Vitalik became the "hard currency" of Ethereum.

The need for engineers to think logically

In the past two years, the engineering mindset of the Ethereum community has become more solidified. This mindset is different from the engineering culture of Google. It does not talk about new experimental standards or application scenarios, but focuses on pure technical research. Within EF, there are hundreds of people who study ZK technology alone. From EDCON, ETHCC to Devcon, all the participants are talking about ZK this and ZK that, which confuses non-technical laymen.

Good product managers know that they should consider needs from the user's perspective, but EF obviously doesn't think so. Under EF's definition, Ethereum wants to become a neutral and trusted world computer. To achieve this goal, it only needs to consider decentralization, security and scalability. Any issues that are not closely related to these three indicators, such as potential business and application scenarios, are of no value.

This value directly affects the product logic within the ecosystem, the most obvious of which is L2. From Optimism to Arbitrum to Starknet, all discussions have focused on technical superiority: why ZK is better than OP; how its TPS is higher than others, how its Gas is lower than others; how different types of ZK Rollup EVM are compatible, etc. But looking back at the market performance of L2 today, you will find how powerless these "code arts" that make developers so happy are in the face of real market demand.

The only L2 that insists on product orientation is now "blue Solana" in the eyes of users and has become the most capable player in the ecosystem. In contrast, several mainstream L2s that were still entangled in various conferences last year about which ZK technology was stronger are now almost ignored, and some may still die in the womb due to technical bottlenecks.

On the other hand, under the influence of EF and its main theme of "orthodoxy", Ethereum began to be oriented towards public goods, and ecological culture and innovation gradually drifted away, repeatedly performing the drama of "clearing the emperor's side".

L2, as a solution to improve Ethereum's scalability, has been shackled by "Ethereum Alignment" since day one, accepting and executing EF's will. Everyone is showing loyalty to Ethereum, wanting to be the most EVM-compatible L2, and wanting to be the prince of Ethereum's scalability. This has made it so that for a long time, the teams that come later are always "more licking" than the previous ones, and EF is of course happy to see this, whoever licks the most will be in power.

This situation is not only happening in the L2 field, Ethereum's redundant infrastructure makes the overlap rate of innovation within the ecosystem very high. A recent example is EigenLayer, a new concept that directly robbed LSD, L2 and even Ethereum's own jobs. Despite this, EigenLayer still has to align with EF in terms of values to show its loyalty, but as mentioned earlier, clearing the court is not necessarily out of loyalty.

After the rise of modular narratives such as Celestia and the strong return of Solana, EF's obsession with orthodoxy has not diminished at all. You can even often hear various Ah Q-style discussions about "L2 without Ethereum DA is not Ethereum L2" or "Solana's single-chip expansion will definitely not be as good as L2 in the future", but no one says what new application scenarios Ethereum can have at present.

Escape from Ethereum

Even in the matter of decline, EF did not do very well. In September last year, MakerDAO announced the "Endgame" plan, proposing to build a new chain with the Solana code base in order to "provide a beneficial boost to the network effect of the entire multi-chain economy." Vitalik then immediately sold 500 MKR and said on the social media channel that Maker's move was "suicidal."

When many big protocols "escape" from Ethereum, they still have to bear the moral judgment from Vitalik or EF. Perhaps they hope that the protocol can go with them to the end, but the development teams obviously do not want to die with Ethereum. Applications always serve users, not blockchains. Although security is an important criterion for many blue-chip protocols to consider when deploying, it is also very stupid to completely ignore the user environment and the market.

So, Ethereum's protocol is fleeing to Solana. Render migrated its tokens to the SPL standard last year; Aave decided to deploy its V3 isolated market version on Neon EVM with an 83% pass rate at the beginning of this year; the GMX community also issued a proposal to deploy an independent contract on Solana; there are also market rumors that Ethena and Pendle will soon be deployed to the Solana ecosystem.

In the face of life and death, orthodoxy is not worth mentioning. Sober developers have long admitted that there will be no absolute center for on-chain finance in the future. Whether it is Ethereum, Solana or other settlement networks, the most important thing is to maintain their market share and survive. In this regard, EF can't help itself.

The burden of ETH

In the process of mainstreaming cryptocurrency, the team seems to inevitably compromise with the old order. The Ripple team has been fighting a lawsuit with the SEC for several years over securities issues; Tornado Cash and Uniswap have been hit by regulatory crackdowns; even in this ETF application, the asset management giant has to play a complicated legal game with "ETH" and "pledged ETH".

In contrast, Ethereum and EF seem to have easily escaped regulatory scrutiny, and the SEC's investigation into EF, which began two years ago, did not affect the smooth passage of the ETF. If it were Ripple, this would never have happened. Does this mean that EF has left the danger zone? I don't think so.

Leaving aside regulatory factors, today's EF is becoming a burden on ETH as an asset. This organization with a strong ideological color has become a negative asset for Ethereum and its ecosystem. After the ETF was passed, ETH entered the mainstream asset hall. When investors consider ETH, their comparison objects are gold, silver and Bitcoin. What needs to be thought clearly is whether investors in the future financial world will value the value of the Ethereum network block or the value of EF ideology.

Ten years have passed, and Ethereum is no longer in the entrepreneurial stage. EF does not need to work as hard as the Solana Foundation, but this does not mean that an organization can sit back and enjoy the fruits of its labor. Looking back at the history of the Internet and even global enterprises, there are countless business empires that died because of stubbornness or failure to be prepared for danger. Like the Internet world, the war in the crypto market will never end, and the same is true for Ethereum.

For ETH, its future value depends entirely on the scarcity of Ethereum blocks. This scarcity does not come from EF's lofty idealism, but from the world's real demand for Ethereum block settlement. And these demands often carry various ideologies. Only if ETH is as unbiased as water can it absorb all potential demands.

Without value, all idealism is empty talk. Today's EF is like a rickshaw driver and an old ox pulling a cart to the Ethereum ecosystem, but as a part of the Ethereum world, EF's mission should no longer be to control the mind and soul of Ethereum, but to ensure the value of Ethereum blocks like all participants in the ecosystem.

"If Ethereum cannot survive without you, then you should be a good old bull; if Ethereum can live better without you, then you should give up the stage." Perhaps EF should consider this issue.

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