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Former Ethereum Foundation leader warns of funding gap as governance shifts
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- DeepHorus
Former Ethereum Foundation member Trent Van Epps has warned that the Ethereum network must rapidly establish new funding institutions as the Ethereum Foundation intentionally reduces its central role. Speaking to CoinDesk's Jennifer Sanasie on Markets Outlook, Van Epps described the Foundation's "subtraction" philosophy—a strategic push to distribute authority and legitimacy across the broader ecosystem. His comments come amid recent leadership changes and workforce reductions at the Ethereum Foundation, which have intensified debates about Ethereum's future governance structure.
Van Epps, who departed the Ethereum Foundation after it became clear the organization would accelerate this decentralization strategy, argues that multiple independent institutions should eventually coordinate the ecosystem rather than a single foundation. He emphasized that the Foundation is actively stepping back from its dominant position rather than consolidating power. This governance shift marks a critical transition phase for Ethereum, which has long relied on the Foundation for core funding and coordination.
The former leader estimates that core protocol development requires approximately $30 million annually, even as the Ethereum Foundation's treasury gradually declines over time. According to Van Epps, the challenge is not shrinking technical needs but identifying new organizations willing to finance public goods that keep the network reliable and secure. His Protocol Guild initiative has distributed nearly $40 million to Ethereum core developers over roughly four years, but he conceded that this is insufficient on its own to replace broader ecosystem funding.
Van Epps argues that Ethereum faces a practical funding challenge rather than an existential crisis. He pointed to a "free rider" problem, where firms benefit from shared infrastructure without contributing to its maintenance. This obstacle must be overcome to solve the funding gap. While the Foundation's treasury declines, the need for robust funding mechanisms becomes more urgent to sustain development and security.
Despite the funding concerns, Van Epps remains bullish on Ethereum's long-term prospects. He highlighted Ethereum's continued leadership in decentralized finance, stablecoin settlement, and EVM adoption, noting that these network effects remain difficult for competitors to match. While acknowledging near-term coordination challenges, he expressed optimism that new institutions and major stakeholders will emerge to help finance Ethereum's shared infrastructure.
Looking ahead, Van Epps believes Ethereum's governance will become more distributed over the next decade. He expects the Ethereum Foundation to continue operating in a narrower role alongside newer organizations focused on research, commercialization, and ecosystem growth. He also argued that Ethereum needs stronger advocacy around ETH as an asset and a clearer narrative connecting the token to the network's expanding on-chain economy.
Long term, Van Epps said success should be measured by broad adoption, with billions of users ultimately accessing Ethereum and its Layer 2 ecosystem. The transition to a more distributed governance model is not without risks, but he views it as a necessary step for Ethereum's evolution. The coming months will be crucial as the community watches how new funding institutions emerge to fill the gap left by the Foundation's retreat.
