How much cryptocurrency do the developers of Etherium have? Details of the team report
A developer fund called the Ethereum Foundation has $1.3 billion in ETH, $11 million in other cryptocurrencies and another $300 million in investments outside of the crypto market, totaling just over $1.6 billion. This is the information from the organisation’s published financial report for 2021. As of March 2022, the fund has about 0.3 per cent of all Ethers in circulation, which is a fairly large amount of cryptocurrency. We tell you more about the details.
The Ethereum Foundation is a non-profit organisation that focuses on supporting Ethereum and blockchain-related technologies. The foundation has serious coin holdings that are used to develop the cryptocurrency project. From time to time its representatives sell some of the cryptocurrency to provide their own liquidity.
For example, the fund is known to have sold 70,000 ETH in late 2017 and early 2018 near the coin's then high. In this case, the creator of the sale was Vitalik Buterin, the creator of Etherium. He talked about the reasons behind it in December 2019.
How many coins do the creators of Ethereum have
The Ethereum Foundation regularly announces funding rounds for startups, grants and charitable payments. However, this is the first time a full financial report has been published by the organisation. As Ethereum Foundation director Aya Mayaguchi points out, developers tend to resort to third parties when distributing the foundation’s funds. Here’s his rejoinder in which he comments on what’s happening.
We believe that more decentralised funding is important for the future of the Ethereum ecosystem. We are constantly trying to allocate resources to third parties that we believe can make better decisions than we can in certain areas.
In other words, the creators understand the importance of the amount of money in their own wallets. At the same time, they believe that it should be managed with other people's opinions in mind, which sounds quite progressive and in the spirit of cryptocurrencies. Recall that a similar model is used by so-called decentralised autonomous organisations, or DAOs. Their peculiarity is participation in life and key decisions of the project by all its participants, not only representatives of authorities, as it happens in traditional spheres of human activity.
According to Decrypt’s sources, the Ethereum Foundation spent $48 million last year. Of that amount, research and project development for the main network of the Ethereum ecosystem was funded at $21.8 million. This also includes upgrading the cryptocurrency’s network and stress testing it. The $19.6 million was allocated as grants under the Etherium ecosystem support programme.
The original report is available at the link.
The Ethereum Foundation is needed both to fund various third-party initiatives and to support the development of Ethereum itself. Here’s a quote from the report on the subject.
The Ethereum Foundation has a conservative fund management policy, which ensures that there are sufficient resources to fund the organization’s core objectives even in the event of a multi-year downturn in the crypto market.
The assets of the Ethereum Foundation
On topic: What will the real return on stacking in Ethereum be once the blockchain moves to Proof-of-Stake?
The 28-page report mentioned that the organisation reserves the right to sell some coins to cover its own needs. That should not be a reason to panic – it is in the developers’ interest to keep ETH stable in the market, so no one is going to artificially collapse its price.
How is the Ethereum Foundation selling its coins?
According to the developers, they try to sell rounds during local highs in Ethereum’s price. For example, during the 2017 bull trend, the team sold about 70 thousand ETH. Another 35 thousand ETH were sold in May 2021, when the crypto market was close to its historical high in terms of capitalisation. Finally, another round of sales took place in November, when the price of Etherium was also near its peak.
Ethereum price in 1 year
So far, the value of the altcoin has declined significantly since its all-time high. The Ethereum Foundation has been very successful in timing mass sales of ETH, so for now the coins will not be sold at the market rate. It will be possible to talk about it after the next notable bullrun wave or even after another “altcoin season”.
As a reminder, so-called "altcoin season" is a period in which Bitcoin's share of the crypto market's capitalisation declines markedly, accompanied by a rise in other coins. Ethereum often serves as a kind of "marker" for this growth - during altcoin season, its price usually reaches a new all-time high.
Ethereum Foundation spending for 2021
We believe this information is a positive for the Etherium ecosystem. Obviously, the developers have more than enough resources to finance further development of the project, which means its representatives will be able to meet any long-term goals. The main one in 2022 will be the migration of the blockchain to the Proof-of-Stake consensus algorithm. Although it has been tentatively postponed until the third quarter of the year, the event is sure to be high-profile because of the scale of the cryptocurrency.
Until that happens, we recommend mining ETH on the 2Miners pool. Firstly, it is profitable. Second, you can mine ETH with even one video card, and rewards can be automatically converted to Bitcoin if needed.
To make sure you don’t miss out on the next “altcoin season”, stay tuned to our millionaires’ cryptochat. There, we’ll talk about other blockchain and decentralisation-related developments.
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