Earlier this week, the Ethereum Foundation released its spring update. Published May 21, the spring update outlined the Foundation’s spending plans for the next 12 months, allocating $19 million to build “the Ethereum of tomorrow”, $8 million to support “the Ethereum of today,” and $3 million to promote “developer growth and awareness.” This $30 million total outlay is part of the 0.6% of all ETH in existence currently held by the Ethereum Foundation, which the update notes is intended to eventually be reduced to zero.
A key component of the Ethereum Foundation’s plans for the next 12 months are what it calls a “policy of subtraction” guiding development of Ethereum 2.0:
“In plain language, following a philosophy of subtraction means resisting the natural tendency of organizations to grow and accumulate value within themselves, and ensure instead that this value is created outside the Foundation in the broader Ethereum ecosystem.”
An infographic contained within the update breaks this policy of subtraction down further, comparing a “Subtraction Mindset” with an “Addition Mindset.” Some of the key tenets of this philosophy are to “distribute” instead of “capture” opportunities, “push out” instead of pulling “in-house,” decreasing prestige, and mattering less.
This emphasis on subtraction provides an interesting thematic counterpoint to the launch of TRON’s Sun Network. TRON founder Justin Sun has never been accused of shying away from the limelight and his name is front-and-center of the new network layer that, as we reported earlier, is intended to make the TRON network 100x more scalable.
It is a step toward the ideal of ultimate democratization of blockchain which has sent Tezos’ price skyrocketing in recent months. Tezos allows for a fully democratic vote among token holders on any upgrades to its network protocol. The first successful network proposal vote on Tezos was conducted in March and has proved an attractive proof-of-concept to crypto traders. Tezos was trading at $0.41 at the start of March and is currently at $1.58, though earlier this week it hit a year-to-date high of $1.80.
So how exactly will the Ethereum Foundation’s “subtraction policy” guide the development of Ethereum 2.0?
The future of Ethereum
The development of Ethereum 2.0 has faced some criticism in recent months, due to the perceived slow pace of development while other blockchain protocols have been moving forward. While his criticism was equally pointed at EOS, Cardano and Ethereum co-founder Charles Hoskinson told Fortune back in April that “a lone samurai” approach to development had hampered the introduction of Ethereum’s Casper Proof of Stake (PoS) protocol. A switch from a Proof of Work (PoW) mining consensus mechanism to PoS is a key end goal of Ethereum 2.0.
But as Vitalik Buterin explained in a post on Reddit, Ethereum’s development is largely being guided by “silent armies” of developers. And the Ethereum Foundation’s spring update shines a light on these “silent armies” that are shaping the development of Ethereum 2.0, including Nimbus, Prysm, Sigma Prime, and Substrate Shasper. Buterin recently shared a Medium article on Twitter which breaks down the complex and multi-layered approach to developing Ethereum 2.0 that involves the work of many independent entities within the Ethereum development community.
Will Villanueva explans my eth2 phase 2 proposals:https://t.co/uk1SO7JRjH
— Vitalik Non-giver of Ether (@VitalikButerin) May 16, 2019
The $19 million dedicated to “pushing out” development of Ethereum over the next 12 months will go to Ethereum’s “silent army” of client teams working on ETH 2.0 itself and other Layer 2 scaling solutions, including state channels and plasma. These funds will also be used to conduct research and development into “Phase 3 and Beyond” of Ethereum, along with working alongside academic institutions and “attracting exceptional research talent.” The update mentions Ethereum hackathons regularly funds around the world, including a recent event in South Africa which featured 70% local developers.
In the spring update, the Foundation also notes that its priorities have changed significantly from a time when Ethereum was a much smaller project and “it made sense for the Foundation to prioritize several “in-house” teams to work on the most fundamental projects.” Going forward, the Foundation claims to place zero emphasis on the difference between in-house and external development, allocating funds equally as part of its broader strategy to fully develop the Ethereum ecosystem.
The $8 million dedicated to supporting “the Ethereum of today” seems to be similarly open to funding development wherever it may be occurring. And the final $3 million of its spending proposals has a very clear objective: “Developers, developers, developers.” Interestingly, the Foundation lists among its priorities within this section one goal of:
Encouraging browsers and other mass consumer technologies to seamlessly integrate Ethereum into their user experiences.
Ethereum for Enterprise
As we mentioned into a report on the big news coming out of last week’s Consensus conference, the Ethereum Enterprise Alliance (EEA) recently issued new client specification documents aimed at helping businesses integrate Ethereum into their services. A key part of the EEA’s announcement was its first official guidance on incorporating off-chain solutions for data-sensitive operations that can benefit from Ethereum’s public blockchain infrastructure without being publicly broadcast.
The spring update mentions several external companies that the Foundation has been “working closely” or “connected” with. These include Microsoft Azure, with “a long-term commitment” to using Visual Studio Code and Azure’s new Blockchain service to “support the Ethereum developer experience.” The update also mentions Opera, which recently announced it was adding TRON support to its desktop and mobile browsers (both of which already support ETH tokens.) And mobile phone manufacturers HTC are also mentioned.
One tantalizing market opportunity for blockchain platforms such as Ethereum could potentially be found through developing new decentralized operating software for Huawei, after it was widely-reported earlier this week that Google was pulling Android support from its handsets. This idea is completely theoretical at this point, though with Chinese blockchain enterprises such as TRON and Elastos dedicated to building the infrastructure of ‘Web 3.0’, it’s easy to imagine many in the crypto space will be eyeing this as a golden opportunity.
Concrete adoption of Ethereum is coming from many other major firms, such as Big Four accountancy firm Ernst & Young (EY). In a press release issued last month, EY announced it was making its Ethereum-based zero-knowledge protocol (ZKP) public domain in order to spark enterprise adoption of blockchain.
And just last week, German engineering and technology giant Bosch announced during its annual conference in Berlin that it was trailing prototypes on Ethereum. While it didn’t specify what these prototypes entailed, speculation has centered on car-charging ports that many previously expected to operate with the IOTA cryptocurrency. As Decrypt Media’s report on the Bosch announcement speculates, Bosch may be hedging its bets as it awaits for the dust to settle on the blockchain arms race.
The latest spring update strikes a bullish tone on future development that coincides with overall market sentiment for Ethereum since the start of the year. Currently struggling to break a key $260 resistance level, Ethereum’s price has more than trebled since seeing lows of under $85 back in December. It was also reported by CoinDesk last week that Ethereum had seen weekly trading volume of over $1 billion on Coinbase when all currency pairings were taken into account – the highest level since December 2017.
While competition may have grown exponentially since its launch in 2015, the Ethereum ecosystem is the most robust it has ever been. The $30 million budget announced for the upcoming year by the Ethereum Foundation may pale in comparison to the huge war chests amassed in ICOs for networks such as EOS, TRON, and Tezos, but an emphasis on “pushing out” development may be all Ethereum needs to expand its dominant position as the second-biggest cryptocurrency by market cap.