Ethereum Co-Founder Details Sell-Off
Many in the cryptocurrency space are outraged that Ethereum co-founder Vitalik Buterin has admitted to selling 70,000 ETH “basically at the top.” In a recent podcast with Eric Weinstein, Buterin detailed how he was able to essentially double the company’s runway by selling what is estimated to be $100 million of tokens in January (assuming they sold around this top). Additionally, Buterin sold 30,000 ETH of his personal tokens for approximately $22 million.
Several Different Perspectives
There are two different ways to interpret this admission. First, you could view it as a form of insider trading or dumping, where the Ethereum Foundation lacked transparency in the disposal of their tokens. This is where the outrage is coming from and it is rooted in the idea that many other protocols have received massive pushback for selling off lots of their tokens.
This happened with Justin Sun of Tron when it was rumored (but never truly confirmed) that he had sold $6 billion of TRON in 2018. And it is still happening with Ripple and the management of the tokens in their escrow wallet. Just this month, they moved 1 billion XRP out of their wallet and then back in 7 minutes later. Many became worried that this was the beginning of a potential dump, but nothing has surfaced since then.
The other perspective is that this is just proper management of a company and those who believe in the long-term potential of Ethereum should be glad that the Foundation has even more runway now. When you net everything out, it should result in a win for Ethereum investors. The last thing they would want is the company making poor decisions in the interest of short-term survival.
Adding Some Color to the Conversation
There are two points that help put all of these actions into perspective. First, the big thing that matters is where the funds go. If the Foundation and Buterin himself are using these funds for their own private enjoyment, then it definitely ends up devaluing the perceived integrity of the entire protocol. But if the funds are actually being used to invest in partnerships, building the ecosystem, and hiring, then that is far more forgivable.
And the other aspect to take into account is why we are just hearing this now. The blockchain ethos is very much about transparency, and this does not seem to be the best embodiment of those values. Perhaps if Vitalik had informed the public sooner, this would have been better received.