Ethereum is facing one of its most uncomfortable periods in recent memory, with Carlos Guzman of GSR Research saying that leadership turnover, Ethereum’s poor performance and intense debate over the role of the Ethereum Foundation (EF) have exposed a deeper strategic crisis for the network.
GSR research points to Ethereum’s identity crisis
In a note titled “Ethereum’s Identity Crisis,” Guzman said framed The issue as more than just a temporary morale problem. At least nine of EF’s top shareholders will leave in 2026, according to the note, including five in May alone. The list includes Protocol Group leaders Tim Picot and Barnaby Munot, veteran researchers Karl Beckhuizen and Julian Ma, and former co-CEO Thomas Stachak.
Many of the exits followed an internal mandate centered around CROPS, an acronym for Censorship Resistance, Open Source, Privacy and Security. The framework was intended to clarify the organization’s priorities, but Guzman wrote that many in the community view it as deprioritizing growth and adoption at a time when Ethereum is already under pressure from fast-moving competitors.
The staff turnover has amplified the broader debate over whether EF should remain a narrow research and protocol organization or take a more active role in defending Ethereum’s position in the market. Dankrad Vest, who previously worked at the foundation, has publicly called for the creation of a new $1 billion-plus organization that is economically compatible with Ethereum to fill what he sees as an institutional void. David Hoffman, Bankless co-host and longtime ETH bull, said he sold all of his ETH, citing frustration with leadership that he sees as not focused enough on growth.
The market backdrop has made it difficult to ignore the internal debate. Guzman noted that Ethereum is down roughly 30% year to date, while the Ethereum-to-Bitcoin ratio fell to 0.027 in May, its lowest level since mid-2025. Network revenue has also weakened with Ethereum ceding ground to chains like Solana, Tron, and Hyperliquid. Revenue is not a complete measure of a network’s health, especially since the blockchain intentionally lowers fees to attract users, but this trend has fueled the perception that Ethereum’s economic appeal is weakening.
Vitalik Buterin He replied with a long post On X which sought to redefine rather than expand the role of the institution. Buterin described EF as a “smaller vessel” that should sell smaller amounts of ETH and focus narrowly on CROPS. He also argued that the core should be viewed as “a single node with a specific purpose,” rather than the Ethereum hub itself.
This framing is a key element of the tension Guzmán identifies. Buterin’s argument is that moving talented people to roles outside the organization may be necessary if the ecosystem is to attract outside capital and develop independent leadership. From this point of view, the Foundation should not become the growth division of ETH. It must maintain the characteristics that make Ethereum credible in the first place.
Buterin’s technical vision rests on three pillars that he said could make Ethereum “very impressive” in ways that competitors cannot easily replicate. The first is error-free software through formal AI-assisted verification, an approach that seemed unrealistic until recently but may now be approaching feasibility.
The second is what he called “available chain consensus,” a feature Guzman described as unique among proof-of-stake chains because it combines traditional BFT-style security against asynchronous network with Bitcoin-like security with up to 49% asynchrony against attackers. The third is to reduce intermediaries, reducing Ethereum’s reliance on centralized relay machines and third-party infrastructure to insert transactions and Privacy through proposals Such as FOCIL and EIP-8141.
The main bet is credible neutrality. Guzman argued that this remains a more compelling feature than Ethereum’s critics often acknowledge. The view that “block space is a commodity” ignores an important point: users have repeatedly demonstrated that they are willing to pay more to transact on one chain rather than another when that chain provides superior assets, applications, liquidity, and network effects.
But the memo also highlighted the limits of this argument. Trusted neutrality may appeal to builders and enterprises, but users still need affordable transactions, fast execution, privacy, and a hands-on experience. On many of these fronts, Ethereum remains vulnerable to competitors working to improve throughput, fees, and user experience today while promising stronger neutrality tomorrow.
Guzman’s conclusion is not that Buterin’s view is wrong. Ethereum’s window to execute on is not unlimited. The question now is whether a smaller, more focused EF can maintain Ethereum’s deepest differentiator while… The rest of the ecosystem builds the growth machinery Turn it around.
At press time, ETH was trading at $2,097.
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