Ethereum is confronting one of its most difficult governance and market moments in recent memory, as senior Ethereum Foundation departures, weakening ETH performance and renewed debate over the foundation’s mandate collide. Carlos Guzman of GSR Research wrote on X that the situation reflects a broader “identity crisis” for Ethereum, with the community divided over whether the ecosystem’s core institutions should prioritize credible neutrality, technical resilience and censorship resistance, or move more aggressively toward growth and adoption.
Ethereum Faces Identity Crisis as Leaders Exit
Ethereum Foundation turnover has become a focal point for that debate. Guzman wrote that “at least nine senior Ethereum Foundation contributors have departed in 2026, with five leaving in May alone,” including protocol cluster leads Tim Beiko and Barnabé Monnot, veteran researchers Carl Beekhuizen and Julian Ma, and former co-executive director Tomasz Stańczak. Several of those exits followed an internal mandate centered on CROPS, shorthand for censorship resistance, open source, privacy and security, which some community members viewed as pushing growth and adoption lower on the priority list.
The dispute has spilled beyond internal foundation circles. Dankrad Feist, a former Ethereum Foundation researcher, publicly called for a new organization with more than $1 billion in funding and direct economic alignment with Ethereum to address what he sees as a gap in the ecosystem. David Hoffman, Bankless co-host and long-time ETH supporter, also said he had sold all of his ETH, citing frustration with leadership he views as insufficiently focused on growth.
Guzman framed the leadership turmoil against a difficult market backdrop. “ETH is down roughly 30% year to date, and the ETH/BTC ratio hit 0.027 in May, its lowest since mid-2025. Network revenue, a proxy for willingness to pay for blockspace, tells a similar story: Ethereum dominated this metric during the 2021 bull run but has steadily ceded ground to chains like Solana, Tron, and Hyperliquid.” He added that revenue is not a complete measure of chain competitiveness because networks are deliberately reducing fees to attract users, but the direction of travel has intensified concern that Ethereum is losing ground to faster-moving rivals.
Buterin Pitches Smaller Foundation Amid ETH Slump
Vitalik Buterin, Ethereum co-founder, responded with a lengthy post on X outlining a narrower vision for the Ethereum Foundation. Guzman summarized Buterin’s view as a call for the foundation to act as “a smaller ship” that sells less ETH and focuses tightly on CROPS, rather than attempting to coordinate or steward the entire Ethereum ecosystem. In that framing, the foundation is not Ethereum’s headquarters, but one institution with a defined mission inside a much larger network.
Buterin’s argument also treats the departure of experienced contributors from the foundation as potentially constructive if those people move into independent roles where they can attract outside capital and build separate centers of leadership. Guzman wrote: “Vitalik stressed the foundation should be understood as ‘one node, with a defined purpose,’ not Ethereum’s center. Relocating talented people into other roles outside of the EF, he argued, is in some sense necessary to allow important functions to attract outside capital and foster independent leadership.” That position cuts against calls for a more centralized, growth-oriented foundation, but it is consistent with Ethereum’s long-running emphasis on institutional decentralization.
The technical part of Buterin’s vision rests on three pillars that Guzman said could make Ethereum “deeply impressive” in ways competitors cannot easily replicate. The first is provably bug-free software through AI-assisted formal verification, which Guzman described as moving from unrealistic to increasingly feasible. The second is “available chain consensus,” a property he characterized as unique among proof-of-stake chains because it combines traditional BFT-style safety under network asynchrony with Bitcoin-like safety under synchrony against attackers up to 49%. The third is intermediary minimization, including proposals such as FOCIL and EIP-8141, aimed at reducing reliance on centralized relayers and third-party infrastructure for transaction inclusion, privacy and other basic functions.
The debate now centers on whether Ethereum’s long-term advantage lies primarily in credible neutrality and institutional restraint, or whether the ecosystem needs more explicit economic coordination to compete with chains improving faster on fees, throughput and user experience. Guzman argued that credible neutrality remains a meaningful moat because apps, assets, liquidity and users tend to gather on platforms they trust will not be captured. But he also noted that users still need affordable, fast, private and usable infrastructure, leaving Ethereum’s core challenge clear: preserve the qualities that made it durable while executing quickly enough to keep rivals from turning today’s performance advantages into lasting network effects.
AI Transparency Note: This article was prepared with the assistance of an AI system based on the sources listed and was reviewed, edited, and approved by a human editor before publication. All quotes, data points, and factual claims are intended to be grounded in the cited source material; however, errors cannot be ruled out entirely.
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