During his participation in the Blockchain Summit event in Montevideo, Uruguay, held on July 25, Uruguayan developer Ignacio Hagopian, a member of the Ethereum Foundation (FE), spoke with CriptoNoticias and, in this first part, discussed the role of that organization within the Ethereum ecosystem.
Specifically, regarding community criticism of the EF for selling its ether (ETH) reserves, Hagopian stated:
“It is impossible to expect the Ethereum Foundation to function without selling ETH.”
Ignacio Hagopian, member of the Ethereum Foundation.
This statement highlights a tension within the ecosystem. The expectation that "central" entities will not engage in practices that could affect the asset's price , versus the reality that these same entities require liquidity to operate.
In this case, according to the developer, the EF (a non-profit entity created to promote and sustain the development of the protocol) uses part of its ETH reserves to fund tasks ranging from maintaining the base software to supporting independent developers and researchers.
Thus, EF financing would play a necessary role, but one that Hagopian believes must be handled with caution:
“It's a risk of centralization, because in the end, whoever controls the Ethereum Foundation ends up controlling Ethereum, and that's something we don't want.”
Ignacio Hagopian, member of the Ethereum Foundation.
The EF, he said, is the only actor to whom everyone turns for help and resources, which places it in a position of privilege, but also of responsibility.
The key, for Hagopian, is to calibrate the intervention according to the moment Ethereum is going through:
“Depending on what stage Ethereum is at in its life, it needs more help from the Ethereum Foundation in terms of resources, in solving problems in a more direct way.”
Ignacio Hagopian, member of the Ethereum Foundation.
He added that as the protocol gains adoption and becomes more established, the role of the EF could be reduced: "Perhaps later, when adoption is greater and it is more consolidated, we can withdraw more aggressively and become less involved."
ETH sales as an investment in the protocol
Criticism of the Ethereum Foundation 's ETH sales often focuses on the potential negative impact on the asset's price. However, Hagopian believes such transactions should be viewed as an investment, not an expense:
“If you sell ETH today to make the protocol better, that will theoretically make Ethereum worth more in the future as well.”
Ignacio Hagopian, member of the Ethereum Foundation.
Along these lines, he emphasized that the organization operates with a long-term vision and is not guided by short-term speculative projections.
"Obviously, if you look at the short term and say, 'I don't want to sell $100 million next month because it's not going to be useful for what I had in mind eight months from now,' I can understand that. But the Ethereum Foundation looks at things in the long term," he said.
From this perspective, demanding that the EF not liquidate part of its ETH holdings implies, according to Hagopian, a lack of understanding of the basic functioning of the organization:
“The important thing to realize is that if the Ethereum Foundation sells ETH, it's because it has to pay the salaries of people working on the protocol. If someone were to say, 'I never want to sell ETH,' what they're indirectly saying is that they don't want the Ethereum Foundation to pay a bunch of people working on the protocol to fix problems.”
Ignacio Hagopian, member of the Ethereum Foundation.
The three strategic areas identified by the Ethereum Foundation
During the interview, Hagopian also shared three areas the EF suggests focusing efforts on at this stage of Ethereum 's development :
- The scalability of Layer 1 (base layer).
- Strengthening the Layer 2 solutions ecosystem.
- User experience and interoperability between networks.
According to Hagopian, over the next "one, two, or three years," the organization plans to become even more actively involved in improving the protocol and application support, depending on emerging needs.
These priorities reflect a technical consolidation strategy that seeks to improve efficiency, reduce transaction costs, and facilitate the use of Ethereum as an infrastructure for decentralized applications.
However, having a single entity propose frameworks for action can entail risks if its influence is not balanced by other actors.
Concentrating decisions around what should be prioritized, or to whom resources are allocated, can lead to a form of centralization that contradicts the open and decentralized spirit that characterizes the protocol.
“Ethereum is a public good,” says Ignacio Hagopian
Finally, expanding on the organization's institutional role, Hagopian said:
"The Ethereum Foundation aims to realize Ethereum's long-term vision. To defend its values and support the protocol's developers and researchers who lack any financial support, because Ethereum is a public good."
Ignacio Hagopian, member of the Ethereum Foundation.
The concept of a public good refers to a good that is non-excludable and non-rivalrous, meaning that its use by one person does not impede its use by others and access to it cannot be denied.
In this context, Hagopian suggests that Ethereum functions as a common infrastructure, which benefits all ecosystem participants and therefore needs to be collectively supported.
