In 2003, when Information Technology (IT) was commonly perceived to provide a definitive competitive advantage to large enterprises, Nicholas G. Carr, editor-at-large of the Harvard Business Review penned a bombshell seminal essay, “IT Doesn't Matter.” He challenged IT’s value and argued: “as information technology’s power and ubiquity have grown, its strategic importance has diminished." Carr advised companies to approach IT investment and management differently. That was a watershed moment for the IT industry, as it dealt a blow to several Chief Information Officers, many of whom began experiencing diminished stature across their organization.
The main point of the essay was not to say that IT was not important, but rather that it became commoditized, hence it is an equalizer and not a differentiator. Therefore, CEOs shouldn’t necessarily overinvest in IT because “greater expenditures rarely translate into superior financial results.”
The analogy I am attempting to draw here equates to the relationship between the Ethereum Foundation and its ecosystem players. Whereas conventional wisdom would lead some to believe that the Ethereum Foundation is a definitive competitive advantage to Ethereum’s ecosystem, the reality is different today. The Ethereum Foundation, as we know it and based on its current scope of behavior and actions, doesn’t matter as much as it did before in relation with the rest of its ecosystem, certainly not from an influential point of view.
This isn't necessarily a criticism of the Ethereum Foundation. The Ethereum Foundation clearly knows it is only one among many others in the ecosystem. From their website, the Ethereum Foundation states their role is “not to control or lead Ethereum”. Furthermore, they assert not being “the only organization that funds critical development of Ethereum-related technologies”…because “The EF is one part of a much larger ecosystem.”
Whereas the EF funds about $100M in projects per year, that amount pales in comparison to the billions of dollars invested by the greater ecosystem, spread between venture capitalists, enterprises, and startup projects. Every time enterprises adopt Ethereum technology and fund large projects that depend on it, they also add value to Ethereum. Granted, these Ethereum Foundation grants tend to focus on the very frontal seed stages of core infrastructural technologies as levers to other technologies and capabilities. They take the most risk by funding ideas that might not even have a 5% chance of success. That’s part of their mission, and it’s a good one.
In past thinking, the Ethereum Foundation aspired to be similar to the Linux Foundation which does an exemplary job at shepherding and supporting another famous technology-based ecosystem while being neutral about it. But let’s be realistic and blunt. The Ethereum Foundation is no Linux Foundation by any stretch of comparison factors.
In an ideal world, the Ethereum Foundation would demonstrate stronger management skills, make rational decisions, earn greater admiration from its community, and drive roadmap implementation with flawless execution. However, we do not have that luxury—unless the Ethereum Foundation undergoes a core transformation (pun intended) and takes its Linux Foundation aspirations more seriously.
No matter what the Ethereum Foundation does, it is always under scrutiny. There is plenty of criticism, some of it legitimate and some perhaps not.
The community often critiques many of the EF’s actions, related to funding choices, sometimes related to their roadmap updates, EIP’s, ERC’s, or even their lack of regular communications.
Sure, there have also been a few blunders here and there and missed opportunities to act proactively instead of reactively.
Could we avoid the meandering paths and endless debates pertaining to roadmap choices, network upgrades, decentralized security, gas prices, and a slew of Improvement Proposals if the Ethereum Foundation was more assertive? Yes, but that’s not the ethos they want to follow. They want the community to debate things ad infinitum until the “right” path emerges, sometimes out of consensus, sometimes by letting things reach their logical conclusion.
We know the Ethereum Foundation lost the plot on forcing others to adopt anything that is not core or requires a mandatory update. This has resulted in a balkanisation of proprietary integrations across the L1-L2-L3 layers spectrum, ultimately leading to a fragmented user experience, which is a bigger deal than they were willing to admit. Many of their actions are often reactionary, but trying to put genies back in the bottle is not so easy when each lateral protocol is in it for themselves and doesn’t prioritize cooperative standards, because they can pay lip service to the Ethereum Foundation and get away with it.
We need to evolve from seeing the Ethereum Foundation as a key driver to everything and rather see them as one participant, albeit an important one.
By now, you can tell I’m getting to the point where I will say, “The Ethereum Foundation Doesn’t Matter”. It’s true. It doesn’t matter as much as it did before.
However, its key engineers and developers matter. Vitalik and his work matter a lot, of course, for Ethereum. But the management of the Ethereum Foundation doesn’t matter so much right now because, to the outside, the Foundation is not well managed.
We know the Ethereum Foundation doesn’t want to be the leader of the Ethereum ecosystem. When I was working closely with them in 2014, I drew a diagram for Vitalik and the Executive Director showing the EF in the center and its ecosystem players around them. They asked me to redraw it, but not with the EF in the center, but rather showing the EF as one of the players. It’s fine not wanting to lead, but to be lackadaisical is an extreme in the opposite direction.
Let’s stop expecting miracles or magic wands from the Ethereum Foundation. The current management has reached the limits of their competencies (or incompetencies if you want to be a cynic).
What matters more is the amount of innovation across the Ethereum ecosystem and around the Ethereum Foundation, despite what they do or don’t do.
If you support Ethereum, you should focus on exploring the ecosystem's state and richness more deeply.
If things don’t change radically, we should prepare for a future where the Ethereum Foundation's actions continue to matter less. As the ecosystem continues to grow, their share of efforts, footprint and influence will continue to diminish in relation to the whole. Maybe it would be a good thing for them because it’s part of the design—being a feature, not a bug, as they say.
If we simply settle for the romantic notion of a stronger Ethereum Foundation, we will miss the opportunity to enhance its effectiveness while staying true to its mission.
