- Vitalik Buterin defended the current leadership of the Ethereum Foundation amid criticism, while acknowledging the need for structural adjustments.
- Justin Sun, founder of Tron, proposed a four-part plan to enhance Ethereum, which includes stopping ETH sales and taxing Layer 2 projects.
- Sun’s proposals received mixed responses, with concerns that taxing Layer 2 solutions might negatively impact their feasibility.
- Nevertheless, some were positive about the practicality of Sun’s ideas, noting certain elements might be worth considering.
Over the past few weeks, the Ethereum leadership discourse has flooded crypto social media, forcing industry spearhead and Ether co-founder Vitalik Buterin to say his piece.
Criticism has been planted squarely at the foot of the Ethereum Foundation, with calls for current Executive Director Aya Miyaguchi to step aside.
Buterin was vehemently against this, however acknowledged the need for an administrative shake-up.
Now, Tron founder Justin Sun has added his two cents to the debate, with a radical plan to right Ethereum’s ship and send the coin to the moon.
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Tron Founder Suggests Reducing Staking Rewards and EF Personnel
Sun’s Ethereum strategy is four-pronged and largely revolves around overhauling the blockchain’s supply and financial methodology.
The first step is to “Halt ETH Sales immediately and Optimize Revenue”. (No, I also don’t understand why “immediately” wasn’t capitalised too).
Ethereum is structured to be inflationary thanks to its unlimited token supply. So, downward price pressure is inevitable when the Ethereum Foundation (EF) sells from its stocks of over US $1b (AU $1.6b) ETH.
Instead, Sun proposes that the Foundation holds its ETH and generates revenue through staking, lending and stablecoin borrowing – something the team has already considered.
Secondly, the Tron founder believes that Layer 2 projects should begin being taxed by the EF. Scaling solutions like Base, Optimism and Arbitrum have made Ethereum’s Layer 1 seem somewhat redundant – offering similar benefits but at a much cheaper price.
By taxing them, Ethereum can theoretically begin raking in a share of their profits and securing the growth potential of ETH.
Sun finishes his suggestions by arguing staking rewards should be reduced, while the EF team should be downsized to focus operations solely on Layer 1 development.
It’s easy to criticise from afar (fun too), and despite the Ethereum Foundation’s clear shortcomings, fixing things probably isn’t as easy as Sun’s four-step plan.
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Certainly, that’s what the crypto community argued in response to his post.
In particular, people believe taxing L2s would eventually kill them. While this may be good for Ethereum, forcing people back onto the L1 with the blockchain’s current capacities would only serve to worsen congestion. Not to mention L2s boast significant DeFi activity that may simply disappear if they become less viable.
That said, certain fundamentals of Sun’s plan aren’t too outlandish and may have some merit.
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