Key Takeaways
- Resignations expose conflict between values, destabilizing leadership
- ‘Ultrasound money’ premium was eroded and base layer fees were commoditized with Ethereum’s success in scaling
- Without coherent narratives, ETH runs risk of capital outflows to Layer 1 cryptos that are more aligned
Foundation Leadership Remains Silent
Intensifying frustration within the community and compounded high-profile departures from the Ethereum Foundation (EF) have inspired demands for a significant restructuring of the network’s governance, amid an intensifying identity crisis engulfing the ecosystem of Ethereum. Influential former insiders are now publicly arguing that the foundation, which has largely remained silent, is not aligned with the economic interests of ETH. The creation of a $1 billion advocacy organization has been suggested by one prominent researcher to redirect the trajectory of the platform.
This week, when foundation researchers Carl Beek and Julian Ma tendered their resignations, the turbulence in the company escalated as the two joined a list of departures that has included former researcher Dankrad Feist, who left last year for alternative Layer 1 network Tempo, and Danny Ryan — once seen as a potential EF leader — who co-founded the institutional marketing arm Etherealize instead.
Prominent Staffers Leave En Masse
The turmoil escalated this week when EF researchers Carl Beek and Julian Ma tendered their resignations, joining a list of departures that already included former researcher Dankrad Feist, who left in 2025 for alternative Layer 1 network Tempo, and Danny Ryan — once seen to be part of the leadership pipeline at EF — who instead proceeded to co-found the institutional marketing arm Etherealize. No detailed explanation was issued by the foundation, which has left a vacuum that members of the community, together with former contributors, have filled with sharp criticism of leadership, strategy, and tokenism.
Dankrad Feist, who has resigned, has proposed through a post on social media platform X that the community create a new organization “economically aligned with Ethereum and accountable to it.” Feist sees a board that prioritizes driving ETH price up and one that is funded in part through staking revenue. To achieve these goals, Feist proposes the creation of a treasury of at least $1 billion. Feist underlines that the economic leverage of EF is limited because EF now controls “less than 0.1% of all ETH” and receives no direct flow of staking or fee revenue from the network.
Ignore Tokenomics at Your Own Peril
For her part, crypto journalist Laura Shin sees Ethereum’s struggles as a consequence of ignoring and neglecting tokenomics after the Dencun upgrade in March 2024, which dramatically reduced layer-2 fees and weakened the “ultrasound money” interpretation that was underlying in ETH’s investment appeal.
“Most people don’t want to believe in something that isn’t also putting up points on the scoreboard,” Shin wrote. She emphasized that focusing on ideology while ignoring price performance has resulted in a “revolt” among token holders. Shin has described Ethereum’s “original sin” as failing to include tokenomics in its every decision-making activity.
More internal controversy has erupted around the resignations, including reports that there was a “mandate” that some contributors were required to sign. Without any official announcements or statements, rumors have been rising over whether recent leadership changes at the EF are the reason behind the brain drain and the cultural shift.
Loss of Talent Mourned
Shin has mentioned that competitors stand to benefit from Ethereum’s unwillingness to stop the departures. Even Ethereum creator Vitalik Buterin gave praise for Feist’s past contributions, calling him “an excellent researcher” who made “immensely valuable contributions,” emphasizing the loss of talent.
The market capitalization of ETH sits at over $250 billion and its price is at $2,148.56. With these figures, the result of the company’s turmoil could have far‑reaching implications for the protocol’s future and its ability to compete in an increasingly crowded Layer 1 industry.
