As a seasoned researcher and blockchain enthusiast with years of immersion in the intricate world of Ethereum, I find the recent discourse surrounding the Ethereum Foundation’s Ether holdings and sales particularly fascinating. Vitalik Buterin, co-founder of Ethereum, has provided compelling insights into the organization’s rationale for liquidating its ETH stash, rather than staking it.


Recently, the Ethereum Foundation, a non-profit organization backing the second-largest blockchain, has faced criticism. Some community members are puzzled as to why the Foundation chooses to sell its Ether (ETH) holdings instead of staking them.

Presently, Vitalik Buterin – a co-founder of blockchain technology – has given an explanation for their decision to sell, shedding light on the reasons behind this choice.

Commitment to Ethereum Development

The events began when Vitalik Buterin posted a roadmap for universal light client verification on Ethereum via social media on October 25th. A user then commented, asking him to cease selling off parts of his Ethereum holdings, a practice he had recently been reported to be engaged in.

In a quick response, the 30-year-old shared that he hadn’t offloaded any ETH tokens during the past month, and in fact, his holdings had expanded over this period. This comment sparked curiosity from another community member, who was interested to learn about the Ethereum Foundation’s stance on the same matter.

Buterin explained that the organization frequently sold their Ether (ETH) for various reasons, among them funding research and development teams who contributed to improvements like EIP-1559. This particular enhancement has significantly lowered transaction times and network fees within the Ethereum network.

He added that the funds generated from the token sales also went into supporting zero-knowledge technology for privacy, account abstraction for user security, and several events promoting Ethereum globally. He said these efforts have helped the blockchain’s security and stability, with no downtime recorded since 2016.

Maintaining Neutrality Over Market Influence

Based on data from the blockchain analysis platform Scopescan, it’s revealed that the foundation has offloaded approximately 4,066 Ether (ETH), which is equivalent to around $11 million in current market value. If Scopescan’s calculations are accurate, and considering the present 3.1% staking return rate, the institution could potentially generate an annual income of approximately $20.08 million if it chose to stake its reportedly owned 271,000 Ether.

Buterin noted that one key reason Ethereum’s organization chooses not to stake its ETH is to remain impartial in case of a potential controversial hard fork, thus avoiding any perceived bias in decision-making.

It’s preferable for us not to find ourselves obliged to decide on an ‘authoritative path’ when there’s a divisive chain split.

He argued that they wanted to maintain Ethereum’s decentralized ethos by letting other entities stake on behalf of the network. This would ensure that no single foundation has an outsized influence on the blockchain.

Because it supports their long-term objectives more effectively, the non-profit prefers to fund development and operations directly, a viewpoint shared by Buterin.

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2024-10-28 11:36