Ethereum’s identity crisis is deepening after high-profile 'brain drain' frustrates the community

A few days after more abrupt departures of several high-profile Ethereum Foundation researchers and contributors, the silence from the EF has only deepened the uncertainty gripping the Ethereum community.

What began earlier this week as shock over more exits of core figures has now evolved into something more existential, according to some community members: a public reckoning over whether Ethereum’s most influential institution still understands the ecosystem it was built to steward.

The Foundation has yet to offer a detailed explanation for the departures or address the growing criticism of its leadership and strategic direction, which many have pointed out over the last few weeks. In that vacuum, community members, investors and former insiders have begun crafting their own narratives about what has gone wrong at the EF and what it may mean for Ethereum’s future.

On Thursday, former Ethereum Foundation researcher Dankrad Feist published one of the clearest articulations yet of a growing view among critics: that Ethereum’s governance and institutional structure are fundamentally misaligned with the economic interests of the network itself.

“The way to save Ethereum,” Feist wrote on X, “is for the community to create an organization that’s economically aligned with Ethereum and accountable to it.”

Feist argued that, despite its cultural influence, the EF does not have as much economic leverage over the ecosystem. The foundation now controls “less than 0.1% of all ETH,” he wrote, and receives no direct flow of staking or fee revenue from the network.

“If we want to get Ethereum back to winning,” he said, the ecosystem needs a new institution with permanent funding, explicit accountability and leadership focused on growth. Among his proposals: a $1 billion treasury, funded in part through staking revenues, overseen by a board incentivized to see ETH appreciate in value.

'Original sin'

Crypto journalist Laura Shin, host of the Unchained podcast, framed the issue even more bluntly.

“I think Ethereum’s original sin was not considering tokenomics with every move it made from Dencun on,” Shin wrote on X, referring to the March 2024 upgrade that dramatically reduced transaction fees on Ethereum layer-2 networks.

The “ultrasound money” thesis, the idea that ETH would become increasingly scarce through fee burns, had once become central to Ethereum’s investment narrative. But critics argue that Ethereum’s scaling roadmap, particularly its embrace of rollups and lower base-layer fees, weakened that dynamic without offering a compelling replacement narrative to token holders.