To the users and the creators,
We’ve proclaimed it before, and we will state it again: Ethereum’s future is luminous, and this year we are witnessing a significant portion of that future materializing as the Ethereum ecosystem builds on a groundwork established by committed research and development over the past years.
This update will concentrate on how the Ethereum Foundation intends to advance Ethereum’s evolution, what we’ve been engaged in concerning allocations and more, and on why our perspective is more optimistic now than ever before.
Who we are, and where we’ve been
The emphasis of the Ethereum Foundation’s operations as a non-profit remains entirely on acting in the best interest of Ethereum. We acknowledge that what started as a modest open-source initiative in 2014 has transformed into the largest community in the sector. Ethereum’s distinctive advantage lies in what we previously described as the global assembly of developers, entrepreneurs, researchers, and enthusiastic users that constitute our continuously expanding family.
We frequently strive to focus on initiatives that only the Foundation can undertake, or that it can execute more effectively than others, to bolster Ethereum and its community. However, owing to this ecosystem of stakeholders, we must begin with a note of gratitude for uplifting yourselves and for enhancing Ethereum’s decentralization each day. To everyone who has persevered in building despite unique obstacles: your achievements and capacity to attain milestones have been, and continue to be, awe-inspiring. And to those users who have contributed over the past year to spark activity around real-world applications thriving on Ethereum: your support and involvement motivate us to exert even greater effort to unlock Ethereum’s potential.
With that, we’ll delineate below how the Ethereum Foundation will elevate its role as a resource distributor and elaborate on how that process functions. As a champion for Ethereum both within our ecosystem and externally, we’ll also discuss how and where to stay informed on the latest developments, all in the year we’ll witness the long-anticipated beacon chain launch and the implementation of proof of stake on Ethereum.
Where we’re heading, and how we will get there
The Foundation resembles a bazaar more than a cathedral. This indicates that every release and function that falls under the “EF” label represents diverse groups and teams operating in various roles to propel Ethereum forward. This is how we perceive Ethereum as well, and just as Ethereum comprises multiple layers, so does the Ethereum Foundation’s portfolio of allocations.
With this understanding, today we will discuss how these allocation choices are determined.
As a collective, no singular or centralized distribution method has proven to be a panacea for the recurring research and development teams, community-building initiatives, or independent innovators that we support. This has become evident through substantial iterations over time that have assisted us in cultivating a multi-faceted approach to resource allocation.
Let’s delve in by envisioning the entire budget allocation procedure as a layered cake that aids us in making decisions. Here’s how it operates.
Type A: Recurring Support
Sectors of recurring support are our initial destination and the most recognizable process for the majority of readers. Some supported teams included here, such as Geth and Solidity, represent where it all commenced. Others, including Eth1.x and Stateless research, the EF’s Eth2 Research team, and formal verification (among others) surfaced later but are vital for Ethereum’s success. Also included under this category are administrative and operational roles, such as those individuals behind the ESP team, communications and community, or administration and legal.
In the past, the EF hosted these and most other supported Ethereum projects, but the Foundation’s role has evolved alongside the broader ecosystem. Today, these teams fall into a support category that EF is optimally positioned to provide at this moment.
Over the last two years, the Foundation has granted more autonomy to Type A teams regarding their own budgets. We believe this structure better reflects how supported teams function as teams.
Each year, teams are requested to submit roadmaps and budget proposals, while others endeavor to assess and approve their requests by evaluating their own requirements. Consider this as a system of checks and balances where there are sufficiently few for us to collaborate on a personal basis. In this manner, we observe which projects are thriving, what requires assistance, where the most advancement and new accomplishments can be achieved, and what types of support help teams accomplish those objectives.
In other areas, we’ve expanded opportunities outward as previously mentioned, adopting an ecosystem-wide strategy that has helped to blur the distinction between internal and external. This enables us to reduce our operational influence and avoid having excessive sway over developmental progress.
As time has progressed, this outward expansion has manifested in several forms, leading to the other types of allocation that we will discuss today. Each of these can generally be regarded as ecosystem support. To manage the next area of focus, Type B funding, the appropriately named Ecosystem Support Program (ESP for short) takes the lead.
Type B: Public Grant Process
A little more on the ESP team!
Since the EF Grants Program transformed into the Ecosystem Support Program, the definition of resources has broadened to encompass both financial and non-financial support. Their goal is to allocate resources where they will exert the most significant effect on Ethereum’s growth and adoption.
Recently, the Ecosystem Support Program: Allocation Update outlined how we distributed grants to external teams in 2019. Moving forward, allocation updates will be issued quarterly, with the Q1 update already available.
The ESP group will likewise be making strides in the upcoming months to disseminate more information regarding how non-financial assistance is distributed, and how teams have utilized these assets!
One of the key roles of ESP is to enhance access to support, utilizing a public inquiry framework to uncover and engage with new initiatives. The Ecosystem Support team reviews proposals submitted via the public inquiry form, integrating peer evaluations, conversations with the applicant, and specialist advisors as required to formulate a strategy that enables teams to thrive. When determining allocations, both financial and otherwise, the ESP group scrutinizes every aspect from timelines, execution, and team composition, to available options, prospective milestones, and impact predictions to identify the ideal match. In summary, ESP’s decision-making undergoes a more comprehensive process than ever, aimed at assisting projects at any stage in honing their concepts and linking with the support they require.
Certainly, it’s challenging to conceive that all necessary “ecosystem support” allocations could be initiated through incoming public inquiries, which are innately reactive. There will inevitably be overlooked areas and unmet demands within the Ethereum ecosystem that necessitate a more proactive strategy built upon our experiences from Types A and B to create something new, leading us to Type C.
Type C: Delegated Domain Allocations
Envision a scenario where a novel and potentially transformative Layer 2 scaling solution gains traction but struggles with an initial deficiency in organization and funding. In Type C, this new focus area would be referred to as a “domain,” and the tool available to us in this circumstance is to “delegate” to one or more trusted domain specialists the authority for allocation and milestone-setting that they require to advance, whether they are part of the EF or not.
These domain specialists can pinpoint specific issues to address and connect with builders to secure funding through grant-based allocations. Crucially, they can achieve this without the EF onboarding new teams, employing a more proactive, directed, and collaborative strategy than what is practicable for the open grant process.
Each domain typically starts with smaller budgets and grants, such as those for the local grant schemes last year in South Korea, Japan, and Taiwan, but these can expand over time. Illustrations of more established domains include applied zero-knowledge work, eth2 coordination, developer experience, the Ethereum.org project, amongst others.
While Type B and C showcase a wide array of allocations, frankly, our team will consistently have blind spots in what we direct — this is an obstacle that no organization can surmount independently. So what about everything else? That’s where you play a role.
Type D: Third Party Funding
Redistributing to independent funding models and groups can aid in further decentralizing our allocation process. While we take pride in how refined and precise our efforts are becoming, redistribution enables funds to reach areas that some of the EF’s teams may have never realized they needed to address.
Examples include community-driven grant matching, such as Gitcoin’s CLR rounds (where you can contribute to the decision-making on how funding is allocated) and DAO funding, like Moloch. Third-party allocators also fall under Type D. These consist of our support for UNICEF’s Crypto Fund, which selects and allocates funds to projects that their team works to identify, and to ETHGlobal, which maintains independence and redistributes funds via hack bounties, among other initiatives. Admittedly, it’s still the early days for Type D, but our efforts in these realms are already well in motion.
While this may seem experimental or radical to some, numerous members within the Ethereum ecosystem have long sought methods to steer funding efforts, and some of their choices have already unlocked new opportunities.
Some of this work complements EF’s other funding types, but may encompass edge cases that were not addressed by Types A-C, while other components may be controversial or even competitive. However, while we hold an opinion on how the initial funding choices are made (for instance, in an initial transfer to a DAO), what happens after that point resides in your hands, which has proven beneficial for innovation and participation.
We recognize that it is critical to ensure allocation accountability throughout the process, which can be daunting, but we can navigate those challenges by diversifying our funding methods. Examples include smaller initial distributions to identify strong performers and diversification of sources like those directed towards DAOs and matching programs. Together, these strategies assist in minimizing risks associated with popularity contests and groupthink, thereby helping us achieve a balanced equilibrium.
Collaborating
A high-level perspective on these initiatives has allowed us to realize that, while each allocation type has its advantages and drawbacks, they are interdependent and collectively contribute to a more robust funding model.
Type A
↑: As the only realm that is inherently recurring, this permits teams to focus comfortably on long-term plans.
↓: Not every issue can be resolved through hiring and team development in a rapidly evolving ecosystem, as teams frequently maintain a long-term perspective.
Type B
↑: Inquiry-based allocations can be more varied and specific.
↓: Not all matters can be addressed via reactive grants, and the team is constrained by what is presented from across the ecosystem.
Type C
↑: Facilitates more proactive prioritization by those possessing expertise, with additional flexibility as well.
↓: These initiatives are often experimental, and the extent of Type C funding can be restricted by EF’s ability to recognize suitable needs and matches.
Type D
↑: Driven by the community, and where we perceive trends over time.
↓: Highly experimental, with a delay in observable impact/returns.for Ethereum.
Every selection that we have at our disposal aids EF in more robustly enabling others to create and innovate. As we have progressed, the distribution of our resources has also continued to transform:
As illustrated above, before the initiation of the EF Grants Program (a precursor to ESP) in 2018, nearly all financial backing was directed towards “EF teams”. In 2018, significant investments were made to support quality initiatives in sectors identified as having the greatest demand. This endeavor contributed to establishing a stronger base, allowing the energy and sheer volume of new contributors to be more sustainable in the long term. We’re pleased to observe that some of those timely decisions are now yielding results as substantial transformations soon materialize on the public network.
In summary, while gradual transitions towards Type B, and subsequently to Types C and D are comparatively recent, they mark the beginning of a trend that will persist in the upcoming future, and we are confident it will lead to positive outcomes.
What lies ahead in 2020?
This year, the Foundation is poised to comfortably fulfill or exceed the commitment made last May. Specifically, we anticipate falling within the range of 25-40 million USD in total allocations, contingent on the needs of the ecosystem, the quantity and caliber of ESP applicants, and advances in scaling our new allocation categories.
Our support for initiatives related to eth2 will also continue to intensify as necessary. Furthermore, our financial backing for eth1.x related research and development remains solid at this vital juncture, and we acknowledge (just as some of eth2’s advancements depend on Stateless Ethereum) that we cannot concentrate on one without acknowledging the other.
Regarding our resources, the Foundation currently has access to approximately 0.53% of all ETH at the time of this post. This percentage has steadily diminished since the network’s inception years ago as we have continued to spend in alignment with our mission to expand and enhance the network and ecosystem.
Track the journey, or join us
Stay informed on Ecosystem Support
Starting this year, we’re amplifying communication around the assistance offered by the ESP, including showcasing milestones and updates from funded projects.
To facilitate this, the team has rolled out an extensive update to the ESP website. These modifications enhance the existing information and introduce new sections to streamline following progress:
- On the featured projects page you can discover more about several projects we’ve backed
- The main page serves as your source for the latest updates on the program
- A new “wishlist” highlights some areas of support that we will concentrate on in the near term.
New sections will refresh and rotate frequently, with more enhancements on the way, so be sure to stay alert for updates. To remain informed of even more recent happenings, follow @EF_ESP on Twitter, and subscribe to get ESP news delivered to your inbox!
And naturally, we aim to fund quality endeavors that facilitate Ethereum’s growth and prosperity, and we would value your assistance in identifying those creators and teams requiring support. If this resonates with you or someone you know, we encourage you to reach out today.
More updates from supported teams
We also invite all supporters of Ethereum to stay informed about the advancement of network-level initiatives through various new series right here on the EF Blog, curated by the researchers and developers who are bringing the future of Ethereum to fruition.
The eth1.x Files, with Griffin Ichiba Hotchkiss
Discover more about what’s currently unfolding with Ethereum, Stateless Ethereum research, and beyond.
Recent Updates:
Eth2 Quick Update, with Danny Ryan
As the name suggests, stay tuned for the latest updates and breakthroughs on eth2 leading up to the activation of the beacon chain.
Recent Updates:
Validated – Staking on eth2, with Carl Beekhuizen
It’s nearly time to put your Ether to use in an entirely new manner. Learn more about staking on eth2 and the underlying principles with continuous updates, including those featured below.
Recent Updates:
and more…
And stay tuned for further updates from supported teams in other EF-backed initiatives, and locate the latest release here!
Over the past year, an increasing number of vital teams have continued to emerge within our decentralized ecosystem, and we take pride in the strength deriving from a non-centralized network. Yet as an entity, we will persist in our efforts to provide opportunities for everyone to innovate without consolidating each project under a single umbrella. In the upcoming year, we’ll witness the launch of eth2, which will be facilitated by multiple clients — all of which will have been developed and sustained by independent teams.
until that time…
We will primarily keep our focus directed and continue our work within the Ethereum ecosystem, but expect to hear more about new initiatives and opportunities to engage shortly! For now, stay tuned to the EF Blog and @Ethereum, explore the new Ethereum.org community page, and prepare for significant news arriving soon from the Scholars and Devcon teams as well.
If there’s anything you’re eager to see that hasn’t been addressed today, feel free to ask! If you have inquiries, concerns, requests, or recommendations, do not hesitate to reach out to press@ethereum.org with your thoughts. We’ll respond with feedback or with external resources from a broad community that continues to generate remarkable content that we are eager to support, and may even publish a Q&A in the coming months with some of the accumulated responses.
Until then, our concentration will be on delivering where we’re needed the most and on executing what only the EF can accomplish. We look forward to seeing where your efforts and the remainder of this year leads Ethereum, and we hope to accompany you on this journey.
🦄
