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Lido’s founder denies creating a rival to the Ethereum Foundation

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Lido’s founder denies creating a rival to the Ethereum Foundation

No “second foundation” to the Ethereum Foundation (EF) has been created yet. Lido founder Konstantin Lomashuk said as much in response to community speculation.

The ecosystem took notice after the entrepreneur quoted the only tweet so far from the Second Foundation X account.

“If a second foundation ever does form, it must have a clear purpose that complements the enormous work of current developers. I appreciate everyone’s support and believe we need more organizations contributing to Ethereum. I will continue to reflect on this based on conversations with those who have reached out,” the entrepreneur wrote.

Some media outlets concluded that Lomashuk was behind creating an alternative to the EF, because he had shown interest in similar ideas on social media.

According to The Block, the Lido founder said in a private Discord chat that he is not involved with the project.

“This is fake news. I have not created any foundations. This is just a Twitter account and not a real Second Foundation yet,” the outlet quoted him as saying.

Austin Campbell of Columbia Business School noted that debate over the idea itself reflects a lack of trust in the EF from the community.

“In essence, this is a revolt,” commented the founder of a DeFi project who wished to remain anonymous.

Change is inevitable

On 18 January, Ethereum co-founder Vitalik Buterin, amid mounting criticism of the EF, announced “significant changes” to the nonprofit’s management. He also outlined the organisation’s goals, largely in response to the complaints.

Some in the community inferred that this referred to the resignation of current EF CEO Aya Miyaguchi. Social media users called to keep up the pressure to have her replaced. But Buterin said he would not tolerate such tactics.

“If you ‘keep the pressure on’, you are creating an environment that is actively toxic to top talent. Some of the best Ethereum developers have recently expressed to me in messages their disgust at the atmosphere being created on social media. You are making my job harder. And you only reduce the chance of me having any interest in doing ‘what you want’,” he wrote.

Earlier, Ethereum co-founder and ConsenSys CEO Joseph Lubin backed a popular community idea to appoint former researcher Danny Ryan as head of the EF. He suggested Jérôme de Tychey, president of Ethereum France, as co-lead.

Core developer Eric Conner spoke in favour of Ryan. After Buterin’s thread, the programmer, who had worked in the ecosystem for 11 years, announced his departure from the project. His X profile now reads “former ETH maximalist”.

Ryan urged the community to “fight your battles with respect and reason”. He noted that part of the discourse around the EF has “become counterproductive”. In his view, the organisation is entering a new era, but evolution does not entail a complete rejection of the “previous strategy and philosophy”.

“I have begun a dialogue with Vitalik and others at the EF about such changes and the possibility of being involved in the process. These discussions began long before this week and are ongoing,” Ryan said.

Support for EF alternatives grows

In the view of the popular NFT investor known as DCinvestor, no EF reforms are possible while Buterin “sits on the throne”. He proposed shrinking the organisation’s role and spinning out research functions to more competent entities.

Uniswap creator Hayden Adams spoke in favour of carving out Ethereum’s technical development. The “second foundation” could be funded by the EF, ConsenSys and other ecosystem projects, he argued. The treasury of the decentralised exchange he leads stands at $6bn.

Amanda Cassatt, founder of Serotonin and a former ConsenSys employee, noted that Ethereum needs a “marketing engine”, which the EF has never provided.

JokeRace co-founder David Phelps told The Block that working with professionals is critical in this domain. If a new structure takes on marketing, that would be a “win for the community”, he added.

“Protocols should have multiple foundations with different specialisations, thereby supporting decentralisation,” said PoolTogether founder Leighton Cusack.

At the same time, he believes the second-largest cryptocurrency has benefited from the EF’s passive stance. The foundation has largely stayed off regulators’ radar, which helped the asset avoid being deemed a security, he said.

“It was the perfect organisation for a hostile regulatory environment. Based in Switzerland, completely off the radar. Ethereum ETFs would not have become a reality if it had been more active,” the expert asserted.

Before his resignation on 20 January, former SEC chair Gary Gensler said the agency had never called bitcoin and Ethereum securities.

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