Forkable Report on Ethereum Protocol Governance and Public Goods Funding Decentralization and Reform
The Ethereum Foundation (EF) has played an essential role in the development and stewardship of Ethereum, but as the network matures, the need for decentralization of its functions has become apparent. The goal of this report is to define EF’s prime directive—stewarding coordination and resourcing for protocol development and expansion—and to guide a structured transition that refines internal functions, spins out non-essential roles, and protocolizes key functions to align with Ethereum’s decentralized ethos.
To accomplish this, EF must streamline its core activities, improve transparency and participation in protocol governance, and adopt a funding model that extends, maximizes and more strategically allocates the Ethereum Foundation's finite treasury, bootstraping a self-organizing ecosystem that no longer needs an Ethereum Foundation. By integrating an AI-assisted sensemaking mechanism to aggregate and map ecosystem needs and enhance participation in protocol development strategy via Ethereum Town Halls, restructuring ecosystem funding through an onchain Donor Advised Fund and other onchain grant-making mechanisms like staking yield pools for various public goods categories, and ensuring research aligns with ecosystem and user needs, EF can reboot its public image and establish new forms of protocol and treasury governance that both maintain credible neutrality and more strategically advance the collective aims of the ecosystem.
Ethereum was founded on principles of decentralization, transparency, and open participation. The Ethereum Foundation was initially created to support and steward the early development of the network. Over time, however, its role has evolved, and today it holds considerable influence over the ecosystem, funding a significant portion of Ethereum’s ecosystem public goods despite the relatively small size of the treasury.
At present, the Ethereum Foundation is currently struggling with governance efficiency and responsiveness, and the ecosystem has begun to reflect a sense that the EF’s focus on internal research rather than external developer needs leads to a misallocation of resources that fails to accelerate Ethereum’s real-world adoption. The EF is inaccessible to many within the Ethereum ecosystem, creating an opaque governance structure that lacks clear accountability mechanisms for ecosystem needs. Lack of engagement with ecosystem builders results in EF research being detached from real-world Ethereum use cases. Lastly, many in the ecosystem feel that the EF operates with an exclusionary & elitist culture that discourages participation from external contributors.
As Ethereum continues to grow, it is imperative that the EF evolves towards a reduction of centralization risks, increased community participation, and funding mechanisms aligned with Ethereum’s long-term sustainability. This report proposes a structured transition toward decentralization, taking inspiration from open governance models like the Internet Engineering Task Force (IETF) while introducing innovative funding structures to support public goods and ecosystem development.
The core mission of the Ethereum Foundation is to steward coordination and resourcing for protocol development and expansion. The Protocol Support team is central to this mission, facilitating the "All Core Devs” and providing a neutral forum to balance incentives and priorities across stakeholder groups.
Currently, Ethereum’s governance and development processes, while transparent, remain inaccessible to most of the community due to the highly technical nature of discussions. Additionally, internal misalignments and competing interests have led to inefficiencies. To address this, we propose: