Vitalik Buterin clarifies why the Ethereum Foundation is selling ETH

The Ethereum Foundation, a non-profit organization that supports the second-largest blockchain, has come under scrutiny of late, with community members questioning why it is selling rather than partaking in its ether holdings ( ETH).

Now, blockchain co-founder Vitalik Buterin has responded, providing detailed information on why the organization chose to sell.

Commitment to Ethereum development

It all started with a social media post on October 25 in which Buterin shared the roadmap for universal light client verification on Ethereum. One user responded asking the programmer to stop dumping, referring to Buterin’s recently reported sales of small portions of his Ethereum holdings.

The 30-year-old responded shortly after, telling the user that he hadn’t sold any ETH tokens in the past month and that his holdings had grown in that time. It prompted a question from another community member, who wanted to know the Ethereum Foundation’s position on the matter.

Buterin gave several reasons why the organization regularly liquidated its ETH stash, including paying researchers and developers responsible for breakthroughs like EIP-1559. This proposal has reduced transaction times and network costs.

He added that the funds generated from the token sales were also used to support zero-knowledge technology for privacy, account abstraction for user security, and various events promoting Ethereum at the level worldwide He said these efforts have helped the security and stability of the blockchain, with no downtime recorded since 2016.

Maintain neutrality about market influence

According to blockchain analytics platform Scopescan, the foundation has sold 4,066 ETH, with a market value of just over $11 million. Scopescan calculated that at the current rate of return of 3.1%, the institution could collect up to $20.08 million per year if it were to stake the 271,000 ETH it allegedly owns.

However, Buterin explained that one of the main reasons the organization does not stake its ETH is to avoid any “official option” in the event of a controversial fork.

“We don’t want to be in the situation of being forced to make an ‘official election’ if there is a contentious bifurcation.”

He argued that they wanted to maintain Ethereum’s decentralized ethos by letting other entities participate on behalf of the network. This would ensure that no foundation has undue influence on the blockchain.

For this reason, the nonprofit’s preference remains to fund development and operations directly, which Buterin said aligns better with Ethereum’s long-term goals.

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