Ethereum protocol researcher Dankrad Feist posted a blunt diagnosis on May 21: the network is losing ground because no organization is both economically aligned with ETH's success and accountable for delivering it. His proposed fix — a new organization seeded with at least $1 billion — directly challenges how the Ethereum Foundation currently operates.
Feist's coordination argument
Feist, known for his work on Danksharding and data-availability scaling, spent years full-time at the Ethereum Foundation before becoming a part-time advisor in October 2025. He now advises Tempo as an L1 advisor. In his post, he argued that while L2 teams, venture funds, and validators capture value from Ethereum's growth, the Foundation captures the least. That leaves core execution under-resourced relative to the ecosystem's size.
The Foundation's numbers
The Ethereum Foundation's Arkham-tracked portfolio stood at roughly $270 million across 14 addresses as of April 2026 — a mix of ETH and stablecoins. It hit a 70,000 ETH staking target early that month. But the Foundation's 2023 expenditure was $134.9 million, and a mid-2025 treasury policy caps annual spending at 15% of reserves, aiming for 5% over five years. It holds less than 0.1% of ETH supply and receives no direct staking rewards or transaction fees. Its staking program produces only modest yield.
Feist's math: Ethereum's market cap is roughly $255 billion. A $1 billion war chest, he wrote, is 'very reasonable' in that context.
Credible neutrality under pressure
Ethereum has long treated credible neutrality as a feature. Feist questions whether that bet holds in a market where competitors move faster. His claim that 'Ethereum is losing' is his own read — not a settled fact. ETH still anchors deep on-chain liquidity and institutional trust. But the gap between ecosystem value and the Foundation's resources is hard to ignore.
The timing isn't great, either. The Foundation's budget is already constrained by its own spending cap, and it has no direct income stream from the network it maintains.
A call to action, not a blueprint
Feist didn't lay out a detailed structure for the new organization. He argued it should be economically tied to ETH — meaning its incentives rise and fall with the token — and seeded with at least $1 billion. Where that money comes from he left open. Whether the community rallies behind the idea or sticks with the Foundation's approach is the unresolved question. No formal response from the Ethereum Foundation has emerged since the post.
