Core developers criticize the Ethereum Foundation: In the face of enormous wealth, you have long abandoned ideals and principles

Author: Péter Szilágyi

Compiled by: GaryMa Wu Talks Blockchain

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Background

Former Ethereum core developer and Geth maintainer Péter Szilágyi recently disclosed a letter he sent to the Ethereum Foundation (EF) leadership a year and a half ago. In the letter, he openly expressed his disappointment with the Ethereum Foundation and pointed out serious issues within the foundation, including unfair compensation, conflicts of interest, and centralized power.

It is understood that Péter Szilágyi has been working at the Ethereum Foundation since 2016. He claims he was fired in November after discovering the “secret second Geth team.” At the time, he announced he was taking a leave of absence, but in reality, he was having a one-on-one discussion with Josh Stark about that team. Within 24 hours, he was dismissed by the foundation for “threatening resignation, which was unacceptable and damaging team morale.” The “secret” team may refer to the roll-up Geth announced publicly in October, but it was not released through official channels. Additionally, financial issues surfaced: Tomasz K. Stańczak, co-executive director of the foundation, wanted to significantly cut Geth developers’ salaries. Szilágyi also mentioned that the foundation had repeatedly attempted to spin off Geth into a private entity, which Stańczak denied. Szilágyi previously experienced emotional outbursts due to workload and salary issues, challenging the patience of some investors. The Geth client faces issues such as inflexibility in pruning storage like Bitcoin and Ethereum Layer 2 clients, storage requirements reaching up to 700GB without technical basis, and potential impacts on decentralization. Maintaining two clients also causes inefficiency and complexity. The foundation repeatedly invited Szilágyi to return, but he refused unless they apologized, which they did not.

Below is the full translated letter:

Hello everyone,

Over the past few years, I have often felt uneasy about Ether, my role in the Geth team, my position within the Ethereum Foundation, and even my place in the entire Ethereum ecosystem. (No, I am not announcing resignation now, at least not yet.) I occasionally discuss various troubling issues with Felix, Martin, and sometimes Josh. These conversations always help me temporarily feel better, but I always return to the initial state. I even realize I can’t clearly articulate what my real problems are (thanks to Felix for pointing this out). So I decided to take some time to organize my thoughts, and this article is basically a summary of those reflections (or at least I hope it will be one—I’ve just started writing).

Before saying anything negative about Ethereum or any specific person, I want to emphasize one point: I have always believed that Ethereum is a force for positive change in the world, and I have always thought the foundation is a positive driving force behind that power (though I often criticize its decisions as overly naive). For me, working for Ethereum and the foundation has been a privilege and one of the brightest moments of my career. I am grateful for everything I’ve gained on economic, personal, and professional levels; at the same time, I am often amazed that I can do things that are embarrassing (sometimes publicly) and still be tolerated. For that, I am deeply thankful. Please do not interpret all my criticisms as a doomsday prophecy for Ethereum’s fate; they are simply my personal views on “why Ethereum has failed me.”

My main issue with Ethereum now is the stark discrepancy between the publicly claimed role I have and how I am actually treated behind the scenes. More often than not, the foundation depicts me as a “lead figure” in the ecosystem; yet whenever there is a public conflict, the foundation’s stance is usually “all part of the plan,” because Ethereum “values different viewpoints.” I want to question this—Dankrad elegantly summarized this privately: I merely hold a “perceived leadership role” (I really envy his wording skills).

In my view, I am seen as a “leader” only because I have maintained Geth’s public image over the past nine years; because I have stood firm against some dishonest participants in the past; and because I dare to openly question those in power, sometimes even within the foundation. People love drama, and what could be more “impartial” than “inside people openly opposing the foundation”? But for me personally, every such outbreak erodes my social credibility and the trustworthiness of the Geth team. Every time I push back against a power figure, more voices come to their defense. For example, when I questioned Justin/Dankrad’s conflicts of interest, Giulio from Erigon immediately defended them, saying “accept the highest bid, no problem.”

Regardless of the facts, I have long felt that I am seen by the foundation as a “useful fool”—a double loss for me. I can choose to stay silent, watch Geth and its value be trampled, and let the big players reshape the protocol at will; or I can stand up and oppose, but each time I speak out, my reputation suffers because it prevents certain people from profiting from Ethereum. Either way, the outcome is the same: Geth (which is me) will eventually be removed from the game. Of course, I could “throw in the towel” and just leave—same result, just faster. For better or worse, I believe the foundation bears significant responsibility: from promoting client diversity, designing consensus penalty mechanisms, to encouraging influential researchers to endorse “dirty but aligned” new clients.

Although we are the earliest team in the ecosystem (besides Vitalik himself), I don’t feel much gratitude for our persistence. Public opinion on Twitter reflects this sentiment well: “Thanks for building the empire, now let those who can make money take over.” This is the first reason I see Ethereum as “failing” me: we originally aimed to create something great, but as soon as enough money is on the table, we are quick to abandon principles.

This leads to my second pain point in Ethereum: the conflict between workers and speculators. From the beginning, working at the Ethereum Foundation has meant poor financial decisions. Since I initiated an “internal reform” two years ago, the Geth team’s compensation has somewhat improved (for employees). But let’s look at the numbers: in my first six years at Ethereum—during which ETH’s market cap grew from zero to $450 billion—my total salary was $625,000 (pre-tax, total, six years, no incentives). That’s the real picture of being a “worker” at the Ethereum Foundation. Geth’s financial situation is better now, but I am sure other roles within the foundation (such as operations, administration, even research) are still significantly lower. This situation is a breeding ground for conflicts of interest and protocol capture.

Almost all early foundation employees have already left because that was the only way to match their income with their contributions. Those who remain are actually exploited—because they “are in it for the cause, not for the money.” As Vitalik put it: “If no one complains about their salary being too low, then it’s too high.” I believe this is one of the foundation’s most serious failures. Moreover, the foundation’s deliberate secrecy about salary information makes me even more convinced— even if it was unintentional at first, the foundation now relies entirely on this structure.

Since Geth’s financial situation has improved, why do I still mention this? Because the foundation is actually laying the groundwork for protocol capture. By systematically suppressing the compensation of those who truly care about the protocol, EF forces the most trustworthy people to look elsewhere for rewards. I believe Justin and Dankrad’s recent advisory roles are blatant conflicts of interest, potential protocol capture, and they themselves are unreasonably downplaying the risks—I do think so. But is it unreasonable for them to accept money? No. They are simply accepting the consequences the foundation has deliberately sown. The devil in the bottle has already escaped.

Over the past decade, the foundation has deprived every employee of “life-changing wealth,” and any attempt at remedy now is pointless. The foundation has been blinded by its endless reserves, and Vitalik’s personal wealth has detached him from reality, to the point that they have never considered: the people working for them also want a comfortable life. No one objects to founders reaping the rewards of success, but the foundation— under Vitalik’s leadership— goes to great lengths to avoid paying fair wages. This is the second reason I see Ethereum as “failing” me: the foundation has placed the protocol at risk of capture, not out of malice, but from a “subtractive” kind of idealism—a naive belief disconnected from reality that people won’t care about money.

Next, let’s talk about Ethereum’s “high-end players.” I respect Vitalik very much, but he has become a victim of his own success. Whether he wants to or not, he has always— and still does— decide what will succeed or fail in Ethereum. His focus, his research directions, his donations and investments almost determine which projects will succeed (with very high probability). His opinions also directly define what is “permitted” in the ecosystem and what isn’t. In other words, the unwritten survival rule in the gray area is: make Vitalik feel “okay.” Ethereum may be decentralized, but Vitalik has absolute indirect control over it.

This may not be a problem in itself, but over the past decade, the entire ecosystem has exploited this phenomenon. Early on, inside the foundation, founders and early holders fought openly and secretly for power and influence. Later, conference participants realized that success depended on Vitalik, so everyone tried to “contain” him. Eventually, this evolved into a core circle of “Ethereum thought leaders”— about five to ten people— who almost invest in or advise all projects. Today, to succeed, you just need those few core figures (or Vitalik himself) to give the nod (Farcaster is an example).

At this point, the problem is no longer just Vitalik himself, but that we have formed an “elite ruling circle” within Ethereum. New projects no longer raise funds publicly but directly approach those 5–10 familiar faces for investment or advisory seats. Everyone understands: if you can get Bankless to invest, they will praise you on their podcast; if you can get researchers as advisors, you can not only solve technical issues but also reduce friction with the mainnet. The key in the gray area is: don’t oppose those five people. Looking at all new projects, you see the same group of people pushing each other forward; and further, behind them are the same 1–3 venture capital firms.

This is the third reason I see Ethereum as “failing” me: we originally wanted to build a world of equality, but now the most successful projects are supported by the same five to ten people, backed by the same few venture capital firms. All power is concentrated within Vitalik’s circle. The development direction of Ethereum ultimately depends on your relationship with Vitalik. It’s quite simple: people tend to be more tolerant of friends than outsiders— so to succeed, you need to be friends with the “kingmaker.” I choose to stay distant because I find making friends for money disgusting; yet I feel deep pain— because this is the reality of our “trustless small empire.”

Where will all this lead us? I really don’t know. I believe Ethereum is beyond repair. I see no way to reverse it. I believe the foundation’s loyalty is already irretrievable. I think Vitalik— despite his good intentions— has created a ruling class that will never relinquish power. Either you go with the flow or get marginalized (at least they will pay you well). As for Geth, I believe we are now seen as a “problem” within Ethereum’s big picture—and I am at the center of that problem—so I see no bright future in continuing to fight.

Over the years, I have refused many crazy high-paying offers just to stay committed to Ethereum. And this has always been the mindset promoted by the foundation. But now, the entire Ethereum ecosystem has collectively decided: “This is just business.” I cannot accept this attitude. I also doubt whether I can remain in this ecosystem if I leave Ethereum or the foundation. So I am currently caught between two difficult choices. Let’s wait and see how the future unfolds.

With my sincerest wishes,

Peter