Ethereum is facing one of the most uncomfortable periods in recent memory, with GSR Research’s Carlos Guzman arguing that a change in leadership, ETH’s poor performance, and escalating debate over the role of the Ethereum Foundation (EF) are exposing a deeper strategic crisis for the network.
GSR study warns of Ethereum identity crisis
In a memo titled “Ethereum’s Identity Crisis,” Guzman framed the issue as more than a temporary morale issue. At least nine senior EF contributors have left the company in 2026, including five in May alone, the memo said. The list includes Protocol Cluster leaders Tim Beiko and Barnabe Monot, veteran researchers Karl Beekhuizen and Julian Marr, and former co-executive director Tomasz Stanczak.
Some of the withdrawals were made in accordance with internal directives centered around CROPS, which stands for Resistance to Censorship, Open Source, Privacy, and Security. While the framework was intended to clarify the foundation’s priorities, many in the community perceived it to deprioritize growth and adoption at a time when Ethereum is already under pressure from faster-moving rivals, Guzman wrote.
The talent exodus is amplifying a broader debate about whether EF should remain a narrow research and protocol institution or take a more active role in protecting Ethereum’s market position. Danclad Feist, a former member of the foundation, publicly called for the creation of a new $1 billion-plus organization economically aligned with Ethereum to fill the institutional void. Bankless co-organizer and long-time ETH bull policy strategist David Hoffman also said he sold all his ETH holdings, citing dissatisfaction with the leadership for not focusing enough on growth.
The market context makes it difficult to ignore internal discussions. Guzman noted that ETH is down about 30% year-to-date, while the ETH/BTC ratio fell to 0.027 in May, its lowest level since mid-2025. Network revenues also slumped as Ethereum ceded ground to chains like Solana, Tron, and HyperLiquid. While revenue is not a perfect measure of a network’s health, especially since blockchains intentionally lower fees to attract users, this trend is contributing to the perception that Ethereum’s economic importance is waning.
Vitalik Buterin responded with a lengthy post about X, which seeks to redefine rather than expand the Foundation’s role. Buterin described EF as a “smaller ship” and said it should sell less ETH and focus on CROPS. He also argued that the foundation should be seen as “one node with a clear purpose” rather than the center of Ethereum itself.
That framing, Guzman points out, is at the heart of the tension. Buterin’s argument is that in order for the ecosystem to attract outside capital and develop independent leadership, it may be necessary to move talent into roles outside the foundation. In this view, the Foundation should not become a growth arm of ETH. It needs to preserve the properties that make Ethereum trustworthy in the first place.
Buterin’s technological vision is based on three pillars, which he said could make Ethereum “very impressive” in a way that competitors cannot easily imitate. First, the software is proven to be bug-free through formal AI-assisted verification. This approach, which until recently seemed unrealistic, may now be moving closer to feasibility.
The second is what he called “Available Chain Consensus,” a property Guzman described as unique among proof-of-stake chains because it combines traditional BFT-style security under network asynchronous conditions with up to 49% Bitcoin-like security under synchronous conditions against attackers. The third is the minimization of intermediaries, which reduces Ethereum’s reliance on central intermediaries and third-party infrastructure to ensure transaction inclusion and privacy through proposals such as FOCIL and EIP-8141.
Most important is reliable neutrality. Guzman argued that this is a more attractive advantage than Ethereum’s critics often acknowledge. The view that “blockspace is a commodity” misses an important point. Users have repeatedly shown a willingness to pay more for transactions on one chain rather than another if that chain offers superior assets, applications, liquidity, and network effects.
But the memo also highlighted the limitations of that argument. Trusted neutrality may attract builders and institutions, but users still require affordable transactions, fast execution, privacy, and a practical experience. On some of these fronts, Ethereum remains vulnerable to competitors that optimize throughput, fees, and user experience today, while promising stronger neutrality in the future.
Guzman’s conclusion is not that Buterin’s vision is wrong. That is, Ethereum’s execution window is not unlimited. The question now is whether a smaller, more narrowly focused EF can maintain Ethereum’s deepest differentiators while the rest of the ecosystem builds a growth mechanism around it.
At the time of writing, ETH was trading at $2,097.
Featured image created with DALL.E, chart on TradingView.com
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