Outside Source
Ethereum co-founder, Vitalik Buterin, defends the Ethereum Foundation’s decision to dump ETH instead of staking or withdrawing from itself.
According to data from Spot On Chain, the Ethereum Foundation made its first Ethereum (ETH) sale in the new year on Jan. 8, 2025, dumping 100 ETH and gaining 329,463 DAI (DAI) tokens in return. On-chain data reveals that throughout 2024, EF has sold a total of 4,466 ETH for $12.61 million at an average value of $2,823. These sales are claimed to often occur right before sharp price drops.
Traders on X were quick to put EF on blast for continuously dumping ETH instead of staking from their own protocol.
“In order to be totally neutral, we literally cannot use the chain we are here to uphold and protect. I’m sorry,” wrote an account with the username DCinvestor in a sarcastic tone, mimicking the EF.
” ‘The EF uses the chain, actually our number 1 use case is dumping ETH.’ Actually insane,” commented another Ethereum trader with the username eric.eth, adding that EF should stake ETF and use DeFi to cover internal costs.
Ethereum co-founder Vitalik Buterin came to EF’s defense by responding to the criticism, stating the two key reasons why the foundation chooses not to stake ETH.
Buterin cited regulatory concerns as being the first reason. Considering Ethereum is one of the largest crypto protocols by market cap, staking a significant amount of ETH could attract unwanted regulatory scrutiny. Such actions could potentially raise questions about whether Ethereum counts as a security or not. Something many crypto firms have had trouble with over the years.
The second reason mentioned by Buterin relates to how staking ETH would require the Ethereum Foundation to “take a position on any future contentious hard fork.” In this case, Buterin is referring to potential divide within the ecosystem which could lead to one side of the community preferring one blockchain version over the other.
Therefore, if EF were to stake its own tokens using one blockchain instead of the other, it would appear as if the EF were endorsing that chain and making its position known.
Vitalik Buterin acknowledges that regulatory concerns have lessened over the years, though the second reason still remains.
“There’s definitely ways to minimize, and we’re recently been exploring them,” he wrote.
In addition, he also explained how withdrawal of ETH could wound up taking longer compared to simply selling the tokens. This is often due to the high number of validators that also use the chain. Therefore, if the EF is the only entity to withdraw ETH, then it would take 2.6 days to complete.
However, if many stakers were to withdraw simultaneously alongside EF, then it could take up to 58 days to complete. That is, if 20% of Ethereum stakers withdraw at the same time.
This article first appeared at crypto.news
