Ethereum Foundation Targets Increased Transparency, ‘Merge’ Delay Could Affect Ethereum’s Market Share

The Ethereum Foundation, the nonprofit supporting the Ethereum network, has for the first time published a report detailing its portfolio holdings. The 28-page report comes as the Foundation seeks to explain its vision to the community and enhance transparency on several matters with it.

Financial details in the report

The Foundation revealed that it held a total of $1.6 billion in treasury holdings as of March 31 this year. In this portfolio, the Foundation says $1.294 billion (80.5%) is made up of Ethereum's native token, Ether – meaning it controls 0.297% of the total token supply. This number included the 39,168 ETH committed to the Client Incentive Program. The tokens are released to client teams over time.

Of the rest, $302 million is held in non-crypto investments, while Foundation has also put its hands on other crypto assets – $11 million worth. As one would expect, the portfolio is largely populated with ETH, having a 99.1% dominance.

The report also confirmed that the Foundation periodically offsets some of its Ether holdings in response to rising prices. This is done to expand the safety margin for the core budget and gain resource-power to continue funding other projects outside the core, even in the event of a market pitfall.

Past instances on record were when the Foundation cashed out when Ether hit an all-time high in November last year – selling 20,000 ETH. Other ‘perfectly-timed’ sales were when it released 35,000 tokens at the height of the May 2021 market and 70,000 ETH all the way back in the 2017 bull market.

Investing in building the ecosystem

In 2021, the Foundation injected $48 million in activities to support the development of the ecosystem in internal and external ventures, including bounties, sponsorships, and third-party fundings such as investments into layer two scaling solutions.

Layer one research and development took the biggest chunk of all spending, taking $21.8 million, while research around layer twos costing $1.9 million. $9.7 million went into community development, while developers, teams, and agencies gulped up $5.1 million.

The report, however, showed how unique a nonprofit the Ethereum Foundation is – “not a normal top-down organization,” insisting that it is not tasked with controlling Ethereum. It explained that it’s only a single entity under a larger ecosystem supporting the biggest altcoin network.

Another delay on Ethereum’s coming Merge accords altcoins an opportunity to surge, crypto strategist says

A largely-followed crypto pundit has forecasted that Ethereum experiencing another delay towards the Merge could allow other altcoins to flourish. Crypto analyst Lark Davis has suggested in a recent tweet that this delay, one of many running as far back as 2019, could offer altcoin chains including Avalanche (AVAX), Cardano (ADA), Polygon (MATIC), and Solana (SOL), a chance to gain an increased footing in terms of market share.

This is largely due to Ethereum’s transaction-unfriendly fees that make it near-difficult to operate on the network, especially with the breadth of alternatives available to users.

Ethereum Foundation’s Tim Beiko broke the community’s spirits further after he revealed the expected June date for when the Merge would have shipped is unachievable. Beiko said that though progress is into the final chapters, it will still take a few more months while not quoting any dates.

Beiko had dampened the community’s mood further, clarifying that the Merge would not have any huge impact on improving the paining fees. Explaining that the Merge would increase Ethereum's throughput by 9%, he said the fees will only fall “slightly.” Sharding, which was also to come this year, was the update to smoothen the fee environment, but it was pushed back to 2023 to allow developers to work on the migration to proof of stake.

Until all this happens, it is expected that the better platforms that rival cryptocurrencies offer will continue biting into Ethereum’s market position.

Montenegro seeks to develop a regulated crypto hub, awards Vitalik Buterin citizenship

Ethereum co-founder Vitalik Buterin is now Montenegrin, confirmed news outlet RTCB last week. Montenegro is aiming to support crypto and blockchain innovation, and it is said that Prime Minister Zdravko Krivokapić sees Buterin receiving the honor as an important step towards achieving this goal – he will help enhance these efforts.

Buterin has previously held discussions with several government officials, including the Prime Minister, on ways to set up Montenegro ready for crypto via regulating cryptocurrencies.

Future Now!

Earlier this month, on April 7, Montenegro’s Minister for Finance and Social welfare Milojko Spajić played host to Buterin at the Future Now! panel chat that reviewed the legality of blockchain, and smart contracts, among other issues.

The event, which also had University of Memphis professor Boris Mamlyk, and Ethereum Foundation researcher Vlad Zamfir in attendance, discussed how to mold a community around blockchain technology, where members can verify identities to avoid crypto crime.

Boris Mamlyk, in fact, suggested decentralized autonomous organizations (DAOs) could be used to verify identities. Still, Buterin insists that there isn’t a “magic one-line principle” to deal with the menace the crime in crypto is.

To learn more about Ethereum visit our Investing in Ethereum guide.