22 May, 2024
Hello everyone,
Over the past few years I've often felt bad about Ethereum, about my role within the Geth team, at the Ethereum Foundation or even within the Ethereum ecosystem in general. (No, this is not me resigning, at least not yet). I had occasional discussions with Felix and Martin, even Josh more sparsely about various annoyances. These chats always helped, but I keep ending up back in the same original place over and over again, and I realised I cannot even formulate what my problem is (kudos to Felix for calling that out). As such, I figured I'll try to take a bit of time to try and gather my thoughts, and this text is mostly the summary of that (or I hope it will be, just started writing it).
Before saying anything bad about Ethereum or any specific person, I want to emphasise that I always considered Ethereum to be a good change in this world, I always considered the Foundation to be a beneficial driving force behind that change (even if I often challenge its decisions for being overly naive), and for me working both on Ethereum and at the EF has been a privilege and the highlight of my working life. I am thankful for all that I have received on all the different aspects: financially, personally and professionally; and I am often surprised for even being tolerated after all the crap I tend to put people through, sometimes publicly. So, thank you for that, and please read every criticism below not as an apocalyptic predetermination on all the different ways and reasons why Ethereum will fail, rather as my personal view of why Ethereum is failing for me.
My primary problem with my current role at Ethereum is, that I feel there's a very strong dissonance in between what people publicly state that my role is, and how they handle it in reality, behind closed doors. More often than not, EF positions me as a "person in a leadership role" within the ecosystem and whenever there are public conflicts, the position of EF is that "this is all according to plan" where Ethereum values opposing opinions. I would like to challenge those statements, which Dankrad also very elegantly summed up in a private email, that I only have a "perceived leadership role" (gotta envy the eloquence, anyway).
In my personal view, me being even considered a "leader" in this space simply boils down to having spent the last 9 years maintaining the image of Geth in public; pushing back on the various past actors' less than ideal honesty; and having the absolute recklessness to call out people of power, sometimes within the Foundation itself. People like a good circus, and how better to portray the impartiality of the Foundation, than having someone from within go head to head publicly. Unfortunately for me, both you and I are aware that every such outburst eats into my social credits, and into the credibility of the Geth team. Every time I push back on power players, more and more voices come to their defence. Point in case: pushing back on the conflict of interest with Justin/Dankrad woke Giulio from Erigon to come swinging that there's nothing wrong with accepting the highest bidder.
Whether it is the case or not, I feel - and have felt for a very long time - a useful fool for the Foundation in a lose-lose situation (for me). I can watch Geth and its values dragged through the dirt and remain silent, giving way to the big players to reshape the protocol as they will. Or I can stand up and go against the grain, gradually chipping away at my reputation every time I say something that might prevent people making their money off of Ethereum. I can pick my poison, but the result is all the same, one way or another, Geth (and by extension, me) will get removed from the equation. Heck, I can also flip the table and quit, same result, just expedited. For better or worse, I feel the Foundation is actually heavily to blame for this. The lobby for client diversity, the consensus slashing rules, prominent research figures always pushing the latest contender client (that play dirty, but fit the momentarily desired direction better).
Even though we're the oldest team within the entire ecosystem (apart from V himself mind you), I really don't see that much appreciation for sticking around. And the sentiment from Twitter also very elegantly sums this feeling up: we're happy you built an empire for us, now move aside and let the people who can make us money take the lead. This is my first reason I feel Ethereum failed for me: we set out to build something great, but we will readily shed all our principles the moment there's (enough) money on the table.
Which leads me to my second pain point at Ethereum, the topic of workers vs. high rollers. It has been the case since forever, that working at the Ethereum Foundation is a bad financial decision. The Geth team is at a fairly good position (for employees) since my last internal crusade from 2-ish years ago. Still, to put a number on the situation, my total compensation for my first 6 whole years at Ethereum (ETH going from 0 to $450B total market cap) was $625K (in total, for 6 years of work, before taxes, zero incentives). That is what it means to be a "worker" at the Ethereum Foundation. Geth's finances are somewhat better now (at least what it was before), but I am certain other roles at the Foundation remain significantly below our numbers (be that devops, operations or perhaps even research). This is simply a perfect breeding ground for perverse incentives, conflicts of interests and eventual protocol capture.
Almost all the initial employees of the Foundation have left long ago as that was the only reasonable way to actually have a compensation proportional to the value being created. Some people remained, and I feel the Foundation overly abused the fact that some people were in this for principles, not for the money. To paraphrase Vitalik: "if someone's not complaining that they are paid too little, then they are paid too much". I truly believe this has been one of the biggest failures of EF leadership, and the fact that the Foundation is structured internally to deliberately hide this information, makes me firmly believe that even if originally this was accidental, the Foundation has since leaned full weight into it.
All this said, if Geth's finances are a lot better, why am I bringing this up now? Because the Foundation set the protocol up for capture. By underpaying exactly those people that truly cared about the protocol, EF forced its most trusted people to start looking for compensation elsewhere. Do I believe Justin's and Dankrad's recent advisorship position is an insane conflict of interest, a potential for capture and that they themselves underplay the risks beyond reason? Yes! Do I believe them accepting the money is unreasonable? No! The Foundation made its bed, now come the consequences. And the genie's out of the bottle.
The Foundation took away life changing money from every single one of their employees over the past decade and no last-minute action is going to matter the least bit. The Foundation was so blinded by their infinite battle-chest and Vitalik by his own personal wealth, that they never even considered that the people working for them would also like to live a similarly comfortable life. Nobody's arguing against the upside of being a successful founder, but the Foundation - lead by Vitalik - went above and beyond to avoid paying their people fairly. This is the second reason why Ethereum failed for me: the Foundation set up the protocol for capture, not deliberately, but under the well-meaning (and naive) strategy of subtraction; and under the unimaginably disconnected-from-reality belief that people don't care for financials.
Which leads me to the "high rollers" of Ethereum. I have the utmost respect for Vitalik, but he became a victim of his own success. Whether he wants to or not, he is - and has always been - directly defining what becomes successful in Ethereum and what doesn't. His attention, direction of researcher brain-power, donations and investments absolutely define which projects succeed (at a very high probability). And his opinions absolutely define what's permitted and what isn't permitted in the ecosystem at large, so the key to gray-area behaviour is to convince Vitalik it's ok-ish. Ethereum may be decentralised, but Vitalik absolutely has complete indirect control over it.
This in itself wouldn't even be such a problem, but for the past decade, everyone within the ecosystem was banking on this phenomenon. In the early days of the Foundation, the early founders and stakeholders did it internally, vying for power and influence. Then the conference attendees realised the key to success is Vitalik and everyone was constantly blockading him. Eventually this turned into a small cabal of high profile Ethereum thought leaders, the same 5-10 people having investments and advisorships in everything. At this point, to become successful, you just need to get the correct 5-10 people around Vitalik - or even him - to commit (point in case: Farcaster).
The issue at this point isn't even Vitalik, rather that we now do have a "ruling elite" of Ethereum. New projects do not do public offerings anymore, they reach out to the same 5-10 people for initial investment, or advisorship roles. Everyone realised that if you can get Bankless to invest, they'll sing odes on their podcast. If you can get researchers as advisors, you both solve hard problems, but also reduce perceived friction with Ethereum mainnet. The key to the gray-zone is that 5 people to not revolt. You find the same exact people behind all the new projects launching, each project directly playing into each other's hands and if you zoom out enough, you will also find the same VCs on the outside.
This is my third issue why Ethereum failed me: because we set out to create a world of equal opportunity, yet all the most successful projects are directly backed by the same 5-10 people, behind who you can find the same 1-3 VCs. And all this direct control is one happy friend circle of Vitalik. Ethereum's direction always boiled down to your relationship with Vitalik. Which is very simple psychology really: you're much more lenient with your friends than outsiders, so be friends with the kingmaker. And that is why I always chose to stay away, because I felt it disgusting to form a friendship for financial gain; yet I find it extremely painful that this is the reality of our trustless little empire.
So, where does this all lead us. I have no clue really. Do I find Ethereum fixable? No, not really. I don't see how any of this can be reversed. I feel the Foundation blew allegiance to it beyond reversal. I feel Vitalik - with all his good intents - created the ruling elite who will never relinquish control anymore, so you either play ball or you get sidelined (at least they pay well apparently). As for Geth, I feel we are considered a problem in the grand scheme of things in Ethereum - myself at the centre of that problem - so I don't really see a bright future for myself with my pushbacks against the issues I see.
I had turned down insane offers throughout the years and held out for Ethereum. That was also always the "required" mentality of the Foundation. Yet, the Ethereum ecosystem as a whole unilaterally decided that "it's just business". I don't think I could live with that mentality. I also doubt I'd be able to exit Ethereum or EF without exiting the ecosystem as a whole. So I'm stuck between two hard places for now. Lets see what the future holds.
All the best, Peter