Ethereum Co-Founder Vitalik Buterin Addresses Criticism Over Ethereum Foundation’s ETH Sales

The Ethereum Foundation has come under fire for selling ETH instead of staking or withdrawing from the protocol. According to on-chain data, the foundation made its first Ethereum sale of the year on January 8, 2025, selling 100 ETH for 329,463 DAI tokens. This sale is part of a larger trend, with the foundation selling a total of 4,466 ETH for $12.61 million in 2024.

Traders Criticize Ethereum Foundation’s Decision

Traders have criticized the Ethereum Foundation for its decision to sell ETH, rather than staking or withdrawing from the protocol. Some have argued that the foundation should be using the protocol it is meant to uphold and protect. Ethereum co-founder Vitalik Buterin has responded to the criticism, citing two key reasons why the foundation chooses not to stake ETH.

“The concerns historically were (1) regulatory, (2) if EF stakes ourselves, this de-facto forces us to take a position on any future contentious hard fork.”

Regulatory Concerns and Hard Forks

Buterin cited regulatory concerns as the first reason for not staking ETH. Staking a significant amount of ETH could attract unwanted regulatory scrutiny, potentially raising questions about whether Ethereum counts as a security or not. The second reason relates to the potential for contentious hard forks, which could lead to a divide within the ecosystem and force the Ethereum Foundation to take a position on one blockchain version over another.

Exploring Alternative Solutions

Buterin acknowledges that regulatory concerns have lessened over the years, though the second reason still remains. He notes that there are ways to minimize the impact of staking ETH and that the foundation is exploring these options. Additionally, he explained that withdrawing ETH can be a time-consuming process, taking up to 58 days to complete if 20% of Ethereum stakers withdraw simultaneously.

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Tips for investors:
• Stay informed about regulatory developments and their potential impact on the cryptocurrency market.
• Understand the risks and benefits of staking and withdrawing from cryptocurrency protocols.
• Consider the potential for contentious hard forks and their impact on the ecosystem.
• Explore alternative solutions and stay up-to-date with the latest developments in the world of blockchain technology.

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