Why Is the Ethereum Foundation Under Pressure?
Ethereum co-founder Vitalik Buterin pushed back against calls for the Ethereum Foundation to take a more active role in defending ETH’s price, marketing the network, and competing more directly with faster blockchains.
The comments come during a difficult period for Ethereum. ETH is trading near $2,094, more than 50% below its all-time high of almost $5,000 reached in August 2025. The decline has increased pressure on the Foundation from investors and some ecosystem voices who want clearer support for token value, stronger messaging, and a more aggressive growth strategy.
The criticism has also intensified after several large ETH holders sold their full holdings and after high-profile departures from the Ethereum Foundation. Together, those developments have fed a wider debate over whether the Foundation is doing enough to protect Ethereum’s market relevance as rival chains compete on speed, fees, and user growth.
Buterin rejected the idea that the Foundation should act as the central manager of Ethereum’s direction or market performance. He said the organization will continue to focus on censorship resistance, open source software, long-range research, cybersecurity, and decentralization.
What Did Buterin Say About the Foundation’s Role?
Buterin said the Ethereum Foundation is not meant to operate as the central authority of the Ethereum ecosystem. Instead, he described it as one participant with a specific purpose among many others.
“EF is not a ‘center of Ethereum’, rather EF is ‘one node, with a defined purpose, alongside other nodes’. We have always said that the EF should be the latter, but many in the Ethereum ecosystem, and even within the EF, wanted us to be the former,” Buterin said.
“Now, we are taking action to ensure that we will be the latter,” he added.
The distinction matters because Ethereum’s governance model depends on multiple independent actors rather than one foundation directing protocol, market, and application strategy. Buterin’s comments suggest the Foundation is trying to narrow its role, not broaden it, even as market pressure rises.
The Foundation’s mandate, published in March 2026, frames its work around protocol durability, decentralization, research, and security. Buterin said the organization will work to strengthen Ethereum’s code base and cybersecurity, but he did not frame its mission as competing with high-throughput chains or pushing Ethereum toward 1 million transactions per second as a primary target.
Investor Takeaway
Buterin’s message is clear: the Ethereum Foundation is not preparing to act like a corporate sponsor of ETH price performance. That may frustrate token holders, but it also preserves Ethereum’s long-running governance model built around decentralization and protocol resilience.
How Did Tokenomics Become the Core Dispute?
The debate over the Foundation’s role has become closely tied to Ethereum’s tokenomics. Critics argue that Ethereum has made major technical choices without giving enough weight to how those decisions affect ETH value, base layer revenue, and investor confidence.
Cryptocurrency journalist Laura Shin said, “I think Ethereum’s original sin was not considering tokenomics with every move it made from Dencun on.”
The Dencun upgrade, released in March 2024, sharply reduced fees for layer-2 transactions. That helped users and scaling networks by lowering transaction costs, but it also contributed to a steep decline in Ethereum base layer revenue. For ETH investors, the trade-off has become more controversial as the token has struggled far below its prior high.
Shin also said most investors “don’t want to believe in something that is not also putting up points on the scoreboard.”
That criticism points to the main tension around Ethereum today. The network continues to prioritize scaling, decentralization, and long-term architecture, but parts of the investor base want more direct attention to value capture. Lower fees may support broader network usage, yet weaker base layer revenue can make ETH’s investment case harder to defend during a bear phase or prolonged consolidation.
What Does the Treasury Strategy Show?
Buterin said the Foundation will focus on “longevity” and stretch its funds to finance research, adding that this means it would sell less ETH in the future.
The statement matters because Foundation ETH sales are closely watched by the market. Any sign of reduced selling could ease concerns that the organization is adding pressure to ETH during periods of weak demand. Buterin also noted that the Foundation holds only about 0.16% of total ETH, compared with other foundations that may hold 10% to 50% of their native tokens.
In May, the Foundation unstaked 21,270 ETH from the Lido liquid staking platform as part of its treasury strategy. Unstaking means those holdings will no longer generate yield for the Foundation, but it does not confirm that the tokens will be sold.
For investors, the larger issue is not only whether the Foundation sells ETH. It is whether Ethereum can connect its technical roadmap with a clearer economic case for the token. Buterin’s comments suggest the Foundation will not move toward market management, promotional activity, or price support. Instead, it will continue to fund research and protect the protocol’s long-term security.
That leaves Ethereum with a familiar trade-off. Its strongest supporters value neutrality, resilience, and decentralization. Its frustrated investors want stronger performance, clearer revenue mechanics, and a sharper answer to rival chains. The Foundation is choosing the first path, even as the market keeps testing the second.
