Ethereum developer Lefteris Karapetsas spoke out against using a portion of validator rewards to fund network upgrades. A heated debate unfolded on the blockchain’s research forum and across social media.
The developer warned about the risk of an oligopoly emerging within the ecosystem, exposing a deep divide between major investors and technical experts.
“The proposed mechanism would create a cartel of the largest stakers, allowing them to redistribute up to 10% of all validator rewards and channel those funds toward any goals they choose, enriching one group of participants at the expense of another,” Karapetsas said.
He stressed that withdrawing coins from staking pools takes far too long, meaning the community would not be able to respond quickly to potential abuses.
The debate quickly expanded beyond the mechanics of funding and touched on the broader issue of Ethereum governance. Karapetsas argued that holding large amounts of locked coins does not mean understanding the network’s technical needs, while stakers’ drive to maximize profits creates conditions for an oligopoly to emerge.
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Karapetsas also criticized Ethereum’s broader direction of development. In his view, the core developers have become completely disconnected from reality.
“My position comes down to disappointment with the way the blockchain has evolved over the past 10 years. This tendency to dismiss outside experience keeps adding technical complexity, which is why we still cannot properly retrieve data from the network and have ended up with an effective monopoly for the Etherscan analytics service,” the developer said. “Running your own archival node now requires an excessive amount of effort, effectively shutting ordinary users out of direct interaction with the protocol.”
In the comments under the post, some participants suggested burning all network fees instead of directing money to the authors of protocol upgrades. Others called for eliminating all coin reserves held by the Ethereum Foundation.
“There is not a single reason why the Ethereum protocol should fund any protocol development at all,” one of the critics concluded.