Ethereum's Eternal Trade-Off

Dankrad Feist, a former Ethereum Foundation researcher and one of Ethereum's core developers, has proposed creating a new organization to replace the EF.

In his view, the entity responsible for guiding the network's development should have a direct economic interest in ETH appreciating in value. It should hold a meaningful share of the supply - not just the roughly 0.1% the Ethereum Foundation reportedly controls today - and earn revenue from network fees through staking.

But Ethereum has already had this kind of organization before. Back in 2016, the Ethereum Foundation itself was financially aligned with ETH's price growth.

And anyone who was involved in crypto at the time remembers where that led. After a flaw in The DAO allowed large investors' funds to be drained, the Ethereum Foundation backed the destruction of one of the core principles cryptocurrencies were originally built upon: blockchain immutability. Under the EF's leadership, Ethereum underwent a hard fork that created a new chain where the theft transaction was effectively erased.

The reason was straightforward: without intervention, investors could have lost confidence in ETH, putting its future growth at risk. The original chain continued to exist and is now known as Ethereum Classic. Investors really did abandon it. You can still exchange ETC for any other cryptocurrency on rabbit.io, but ETC now trades at a price roughly 235 times lower than ETH.

That is why Feist's proposal is more complicated than it may seem at first glance. On one hand, economic incentives tend to overpower beautiful romantic ideals, stripping cryptocurrency of its social, political, and cultural potential by turning it into just another financial asset. On the other hand, without those incentives, growth may never come at all. The market itself does not appear willing to value ETH at $10,000, or even $5,000 - arguably not even at $3,000. Today, ETH is worth less than it was five years ago. And without a leadership team that is financially motivated to support the ecosystem, ETH could eventually face the same fate as ETC.

The charts are shown in the CoinGecko screenshot above.