The leading altcoin is in desperate need of a major structural overhaul if it wants to protect its turf. That is the verdict from former Ethereum Foundation (EF) researcher Dankrad Feist, who argues that the current governance model is broken. Feist claims the EF now controls a microscopic slice of the total supply, leaving it without real economic teeth to fight back in an increasingly brutal layer-1 war.
Loss of leverage
The non-profit Ethereum Foundation currently commands less than 0.1% of the total ETH circulating supply. To make matters worse, the entity is completely cut off from the network's core cash flows, capturing zero revenue from validator staking rewards or transaction fee distribution.
To steady the ship and put Ethereum back on a winning trajectory, Feist urged the community to establish a rival powerhouse entity with a starting capital of at least $1 billion.
"That is very reasonable for an ecosystem with a $250 billion market cap," he noted.
Four steps to victory
The restructuring plan hinges on a few aggressive pivots. Beyond the massive war chest, the new organization requires a highly competent leader who is genuinely ready to get in the trenches and fight.
Feist proposes making this new entity accountable to a dedicated board of directors, specifically composed of individuals whose incentives align with pushing the asset's market price higher.
The ultimate linchpin of the reform, however, is permanent funding. The expert suggests hardcoding a mechanism to route a slice of staking yields directly into the new organization's treasury. Token holders would then be able to tweak these allocations via decentralized governance tools.
"It is very hard to imagine now, but I think this is the only way. It will probably happen, but it might take a long time before it becomes consensus," Feist emphasized.
The Snapshot team instantly chimed in on the manifesto, offering to deploy their complete suite of governance infrastructure to facilitate the voting rails. Wintermute CEO Evgeny Gaevoy also backed the initiative, calling it the most transparent blueprint for decentralized autonomous trusts (DATs) to actually function.
Corporate capture risks
The proposed shakeup immediately triggered fierce pushback from the developer ranks. A core builder going by the handle Potuz warned that such an entity would be dead on arrival unless it wrested control over the codebase upgrade schedule and hardfork deployments. Yet, handing over those keys introduces an entirely new set of systemic threats.
"In that case, I would very much disagree with this statement, as it would effectively centralize Ethereum, making it another corporate chain and making it worthless as a blockchain," Potuz cautioned.
Feist hit back, countering that the organization does not necessarily need absolute ownership over the code, but should ideally command massive influence over the roadmapping process.
Analysts at research outlet Eli5DeFi voiced their own skepticism, likening the move to setting up a corporate shadow entity. The team questioned whether community-driven initiatives could ever successfully re-engineer core tokenomics without fracturing the underlying architecture of the project.
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