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Community Perspective | Is it appropriate for the Ethereum Foundation to transfer 20,000 ETH to an exchange on 11/11?

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Community Perspective | Is it appropriate for the Ethereum Foundation to transfer 20,000 ETH to an exchange on 11/11?

On the evening of 11/11, the Ethereum Foundation sent 20,000 Ether to the exchange Kraken. Despite the lack of a significant price correction, it has gradually been forgotten by the market. However, if a collapse similar to that of January 2018 were to happen again, with venture capital institutions taking on the role of sellers, would the community once again criticize the move?

Ethereum Foundation, EF

The Ethereum Foundation (EF) is a non-profit organization dedicated to advancing Ethereum-related technologies and providing financial or non-financial support to a wide range of Ethereum projects and entities. While EF is not the only organization funding the development of Ethereum-related technologies, it also has a need to hire full-time developers.

Source: Week in Ethereum News

As a result, EF has always had funding needs, as do almost all projects. According to Etherscan data, EF has been consistently and continuously selling Ether over the past few years to sustain its operations.

One of the most notable instances was when founder Vitalik Buterin convinced EF to sell 70,000 Ether and cash out nearly $100 million when the Ether price was high in 2018.

Most recently, on 5/17, EF transferred 35,000 ETH to Kraken, after which the price of the coin saw a significant drop of up to 50%.

EF Ether Balance Over the Years

Community Perspectives

EthHub co-founder Anthony Sassano has always been a staunch supporter of Ethereum. He expressed his views on this event on Twitter, stating that EF sent 20,000 Ether to the Kraken exchange in the first 33 hours, and 20,000 Ether was also burned on-chain. He pointed out:

$90 million worth of Ether can easily be absorbed by the market. I doubt EF will sell all at once. The question is whether they will sell at all. People are just trying to spin a narrative as usual.

The Block's Research Director Larry Cermak believes that this is still a relatively large sell-off. He also mentioned that if an early investor in SOL, the venture capital firm Mulitcoin, were to send $90 million worth of SOL to an exchange, the community's reaction would be one of widespread panic and ridicule.

Larry Cermak agrees that the selling pressure can be absorbed, but he hopes that EF can improve the transparency of their selling process and fund management. In this situation, regardless of the meaningful use of EF's funds, it will cause extreme fear in the crypto community. He stated:

Selling a large amount at the top is unhealthy. Selling gradually and selling near the previous high, almost $100 million, why not do it over-the-counter? It's a joke. Why not do it gradually over time instead of trying to time the market top?

Ethereum prediction platform Gnosis founder Martin Köppelmann emphasized that he also hopes for more transparency from EF. However, he pointed out that their responsibility does not lie in considering the psychological impact on the market:

Why not take advantage of market timing? I'm glad they sold at the peak in 2018, not during the bear market from 2019 to 2020. I think buffering extreme situations like long-term bear markets is reasonable.

Additionally, some in the community mentioned that EF's address balances are publicly transparent, and anyone can know when sales will occur, but for project-side wallets like SOL, AVAX, DOT, the information is unknown.

Overall, the good news is that Ether did not collapse as a result of this and has returned to the $4,700 level of November 11.