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Ethereum Foundation considering formal conflict of interest policy after community backlash Ethereum Foundation considering formal conflict of interest policy after community backlash

Ethereum Foundation considering formal conflict of interest policy after community backlash

Executive director Aya Miyaguchi said the foundation shares the community's concerns and is working on a formal policy to address them.

Ethereum Foundation considering formal conflict of interest policy after community backlash

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

Ethereum Foundation (EF) is considering implementing a formal conflict of interest policy following backlash over two prominent developers joining EigenLayer as advisors.

Executive director Aya Miyaguchi addressed the issue in a social media post, emphasizing the importance of maintaining credible neutrality within the organization. She said the foundation shares the community’s concerns and is committed to maintaining trust.

Miyaguchi said:

“It is clear that relying on culture and individual judgment has not been sufficient, and we have been working on a formal policy to address this problem for a while now. We will be accelerating this work and will share an update soon.”

Controversy

The controversy began on May 18 when prominent crypto trader Jordan Fish, known as Cobie, publicly questioned Ethereum co-founder Vitalik Buterin about the ethics of EF developers receiving significant financial incentives from projects built on the network.

Cobie’s tweet specifically used EigenLayer as an example and sparked widespread discussion on social media about potential conflicts of interest. He wrote:

“How do you feel about Ethereum Foundation core developers or researchers taking life-changing packages from projects built on Ethereum to become ‘advisors,’ when those projects may have conflicted incentives with Ethereum, either now or in the future? For example — purely theoretically, of course — let’s say, EigenLayer.”

Following Cobie’s tweet, Ethereum Foundation researcher Justin Drake disclosed his advisory role at EigenLayer on May 19. Drake revealed that he received a substantial incentive in Eigen tokens, estimated to be worth millions of dollars over a three-year vesting period.

The disclosure heightened concerns about transparency and potential conflicts of interest between EigenLayer and the Ethereum Foundation. Drake also stated that the information had been public since May 3, and the timing of the disclosure with Cobie’s tweet was a coincidence.

On May 21, another Ethereum Foundation researcher, Dankrad Feist, also disclosed his advisory role at EigenLayer. Feist, known for his work on “danksharding,” confirmed he had also received a significant allocation of EIGEN tokens and assured the community that his advisory role would not influence his positions on the development of EigenLayer.

Conflict of interest concerns

The disclosures have raised questions about potential conflicts of interest, especially given the systemic risks EigenLayer might pose to Ethereum. EigenLayer is a platform that allows users to deposit and “re-stake” Ether from various liquid staking tokens to secure third-party networks or validated services.

Many blockchain experts have expressed concerns about the potential centralization and additional load imposed on stakers by running restaking services.

Drake assured the community that he would reinvest or donate all proceeds to worthy projects within the Ethereum ecosystem and pledged to end the advisorship if EigenLayer’s direction conflicted with Ethereum’s interests.

Feist, in his disclosure, emphasized that he would take contrarian views on EigenLayer to focus on risks and decentralization. He wrote:

“I am taking this position personally, not representing the Ethereum Foundation, and with a focus on risks and decentralization. I do receive a significant amount of tokens from this position. I do not believe that they will change or influence my positions on how the core protocol should be developed, but I believe that the community should know about this so that they can keep me accountable.”

The Ethereum Foundation’s move to formalize a conflict of interest policy marks a significant step in addressing the community’s concerns and maintaining trust within the ecosystem. The foundation is expected to provide further updates on the policy soon.