The Ethereum Foundation suspends ecosystem support programs to undergo a strategic shift.

CN
5 hours ago

The Ethereum Foundation announced on August 29, 2025, the suspension of public funding applications for its Ecosystem Support Program (ESP). This decision marks a significant adjustment in the Ethereum Foundation's funding strategy, aiming to shift from passive responses to proactively laying out high-impact projects to better adapt to the rapid growth and complex demands of the Ethereum network. According to the latest announcement on the Ethereum Foundation's official blog, this suspension will not affect the support for existing funded projects but will free up resources for the foundation, optimize internal processes, and announce detailed strategic priorities in the fourth quarter of 2025. This move has sparked widespread discussion in the community, seen as a signal of the Ethereum ecosystem's transformation towards greater efficiency and sustainability.

Evolution of the Ecosystem Support Program and Reasons for Suspension

The Ecosystem Support Program originated from the funding initiative launched by the Ethereum Foundation in 2018, initially aimed at providing financial support for open-source projects that promote Ethereum's growth. Over time, the program has evolved into a comprehensive support mechanism covering areas such as developer tools, research, community building, and infrastructure. In 2024, the Ecosystem Support Program awarded nearly $3 million in funding to 105 projects through public application channels, including developer tool Commit-Boost, data analysis tool BundleBear, educational project Web3Bridge, zero-knowledge proof research ZK Playbook, and community event Ethereum Cypherpunk Congress. These grants not only fostered technological innovation within Ethereum but also strengthened the construction of public goods in the ecosystem.

However, as the Ethereum ecosystem expanded, the Ecosystem Support Program faced resource bottlenecks. The Ethereum Foundation noted in its announcement that the small team size (lean team) and the surge in public applications led to most time and resources being consumed in the review process, limiting the foundation's ability to explore new strategic opportunities. This suspension is precisely to address these challenges: the Ethereum Foundation plans to keep annual spending within 5% of the Ethereum treasury and shift from a "reactive model" to a "proactive model," aligning more closely with the priorities of other Ethereum Foundation teams. "This change will give us time to reorganize, allowing us to focus on strategic initiatives while considering the priorities of other Ethereum Foundation teams," the Ethereum Foundation's Ecosystem Support Program team stated in an official announcement.

This adjustment is not an isolated event but part of a broader restructuring of the Ethereum Foundation. As early as June 2025, the Ethereum Foundation underwent internal structural adjustments, including layoffs in the core team, to enhance operational efficiency. Additionally, the Ethereum Foundation recently denied rumors of a $12.8 million sale related to old ICO wallets, further emphasizing its cautious approach to fund management. These measures reflect the Ethereum Foundation's efforts to balance innovation and sustainability against the backdrop of Ethereum's market capitalization exceeding $500 billion, with a total value locked (TVL) in DeFi reaching $91 billion and a stablecoin market cap of $148 billion.

Community Response and Continued Support

The community's response to this suspension has been diverse. Existing grantees will receive ongoing support, including financial and non-financial assistance, such as guidance, project feedback, and resource connections provided through "Office Hours." The Ethereum Foundation emphasized that the suspension only applies to new public applications, and funding opportunities for other Ethereum Foundation teams remain unaffected. On the X (formerly Twitter) platform, the official post from @EF_ESP sparked heated discussions, with some developers welcoming this "evolution," believing it will allow funding to be more precisely directed towards key areas such as infrastructure and Layer 2 interoperability; while others expressed concerns that this might intensify competition for early project financing, especially for developers in underdeveloped regions.

Discussions on the X platform indicate an overall optimistic attitude within the community. For instance, accounts like @cryptonews and @ethdaily shared the announcement, emphasizing that it will "better support Ethereum's growth." Some users, such as @memesmetax, pointed out that this will shift from "reviewing every application" to a "targeted model," prioritizing the resolution of ecosystem pain points. However, there were also broader criticisms, such as @phil_uplc questioning the direction of the Ethereum Foundation's leadership, but these voices were more directed at the overall ecosystem rather than the specific Ecosystem Support Program. Overall, the market reaction was mild, with the price of Ethereum (ETH) stabilizing around $4,390 after the announcement, with a market cap of approximately $530 billion.

Strategic Impact and Market Outlook

This transformation resonates with global blockchain trends. The CoinCu research team noted that foundations like Tezos and Polkadot have enhanced funding efficiency and driven ecosystem innovation through strategic restructuring. The adjustments made by the Ethereum Foundation may foster more innovative partnerships, particularly in the DeFi, Layer 2 applications, and infrastructure sectors, which are expected to significantly impact Ethereum's long-term growth. Analysts anticipate that the new model will focus more on selective funding, similar to a long-term allocation framework, targeting structurally deficient areas. In the short term, developers can turn to Gitcoin rounds, DAO funding, or developer collectives as alternatives.

Market data shows that Ethereum's resilience is evident. Despite a net outflow of $37.5 million (equivalent to 102,000 ETH) from BlackRock's ETH ETF in August, overall demand remains strong, with institutions like BlackRock absorbing ETH equivalent to 52 days of issuance each week. The strategic pause by the Ethereum Foundation is seen as a positive signal for optimizing resources and reducing the "burn rate," helping Ethereum maintain its lead in a competitive environment.

Sustainable Growth of the Ethereum Ecosystem

The Ethereum Foundation's strategic pause is not only an upgrade of the funding model but also a milestone in the overall maturation of the Ethereum ecosystem. It will activate more high-impact projects, driving comprehensive innovation from developer tools to open standards. The announcement of new priorities in the fourth quarter of 2025 is highly anticipated, expected to focus on network scalability, interoperability, and community resources. "Our commitment to supporting the Ethereum ecosystem and maintaining its public goods remains unchanged," the Ethereum Foundation's Ecosystem Support Program team reiterated. In the global Web3 wave, this adjustment will help Ethereum solidify its leadership position as a DeFi and smart contract platform, ushering in a more vibrant phase of development.

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