cyrpto Buterin, continues, defends, dump, ETH, Vitalik Mark January 21, 2025 0 Comments

Vitalik Buterin defends EF as it continues to dump more ETH in 2025

Ethereum co-founder Vitalik Buterin defends the Ethereum Foundation’s decision to dump ETH instead of staking or cashing out on its own.

According to data from Spot On Chain, the Ethereum Foundation made its first Ethereum (ETH) sale in the new year on January 8, 2025, giving up 100 ETH and gaining 329,463 DAI (DAI) tokens in return. On-chain data reveals that during 2024, EF sold a total of 4,466 ETH for $12.61 million, with an average value of $2,823. These sales would often take place just before big price drops.

Traders on X were quick to blast EF for continually dumping ETH instead of staking from their own protocol.

“In order to be completely neutral, we literally cannot use the channel that we are here to maintain and protect. I’m sorry,” wrote an account with the username DCinvestor in a sarcastic tone, imitating the EF.

” “EF uses on-chain, in fact our number 1 use case is ETH dumping. “Actually, this is crazy,” commented another Ethereum trader with the username eric.eth, adding that EF should bet on the ETF and use Challenge to cover internal costs.

Co-founder of Ethereum Vitalik Buterin came to EF’s defense in responding to the criticism, stating the two main reasons why the foundation chose not to bet on ETH.

Historically, the concerns have been (1) regulatory, (2) if EF puts us on the line, that de facto forces us to take a position on any future controversial hard forks.

(1) is lower than it was before, (2) remains. There are certainly ways to minimize (2), and we have recently explored them.

– vitalik.eth (@VitalikButerin) January 20, 2025

Buterin cited regulatory concerns as the first reason. Given that Ethereum is one of the largest crypto protocols by market capitalization, staking a significant amount of ETH could attract unwanted regulatory scrutiny. Such actions could potentially raise questions about whether or not Ethereum counts as a security. Something that many crypto companies have had issues with over the years.

The second reason Buterin mentioned concerns how staking ETH would force the Ethereum Foundation to “take a stance on any future controversial hard forks.” In this case, Buterin is referring to a potential divide within the ecosystem that could lead one side of the community to prefer one version of blockchain over the other.

Therefore, if EF were to stake its own tokens using one blockchain over another, it would appear that EF was endorsing that chain and making its position known.

Vitalik Buterin acknowledges that regulatory concerns have lessened over the years, although the second reason remains.

“There are certainly ways to minimize, and we have recently explored them,” he wrote.

In addition, he also explain how withdrawing ETH could take longer than just selling the tokens. This is often due to the high number of validators also using the chain. Therefore, if the EF is the only entity withdrawing the ETH, it would take 2.6 days.

However, if many stakeholders withdraw alongside EF simultaneously, it could take up to 58 days. That is, if 20% of Ethereum participants withdraw at the same time.