Ethereum continues to evolve at a rapid pace, not just in its technology but also in its governance, organizational structure, and financial strategy. In a recent interview, Hsiao-Wei Wang, Co-Executive Director of the Ethereum Foundation, provided rare insights into the inner workings of one of the most influential blockchain ecosystems in the world. Her remarks shed light on how Ethereum is navigating the complex transition from a developer-driven project to a mature, decentralized network with long-term sustainability goals.
The Technical Evolution: Upgrading Ethereum Mid-Flight
One of the most significant achievements in Ethereum’s history — the transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS) — was described by Hsiao-Wei as akin to “changing the engine of an airplane while it’s still flying.” This powerful metaphor captures both the ambition and risk involved in re-architecting a live blockchain that supports thousands of applications and billions of dollars in value.
The successful completion of The Merge marked more than just an energy efficiency milestone; it demonstrated Ethereum’s unique ability to execute fundamental upgrades without halting operations. According to Hsiao-Wei, the technical implementation was less daunting than the coordination challenge. Aligning multiple client teams, developers, node operators, and stakeholders required unprecedented levels of communication and trust.
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This shift underscores a core principle of Ethereum’s development philosophy: continuous improvement through collaboration. With sharding, danksharding, and further scalability enhancements on the roadmap, Ethereum remains committed to solving the blockchain trilemma — scalability, security, and decentralization — without compromising any single pillar.
Organizational Transformation: From Centralized Oversight to Decentralized Governance
As Ethereum matures, so too does its supporting infrastructure. The Ethereum Foundation is undergoing a strategic reorganization aimed at increasing efficiency and promoting ecosystem-wide ownership. It has restructured into three core divisions, each focused on distinct aspects of protocol development, research, and community support.
More notably, certain functions — especially those involving engagement with traditional financial institutions and regulatory bodies — are being spun off into independent entities. This move reflects a broader trend toward multi-centric governance, where no single organization holds monopolistic control over decision-making.
Hsiao-Wei emphasized that this decentralization isn’t just ideological — it’s operational. By distributing responsibilities across specialized organizations, Ethereum can respond more nimbly to diverse challenges while reducing systemic risks associated with central points of failure.
This evolution also signals a cultural shift within the Foundation itself. Rather than positioning itself as the permanent steward of Ethereum, leadership now openly acknowledges the possibility — even desirability — of eventually stepping back.
“If there are other organizations in the community capable of fulfilling the Foundation’s role, we may downsize,” said Hsiao-Wei.
Such a statement stands in stark contrast to many other blockchain projects where founders seek to consolidate power. Ethereum’s willingness to plan for its own obsolescence may be one of its greatest strengths.
Financial Strategy: Beyond Selling ETH
For years, critics have questioned the Ethereum Foundation’s practice of selling ETH to fund operations. Hsiao-Wei offered clarity on this issue, explaining that approximately 75% of the Foundation’s expenses are denominated in fiat currency — salaries, legal fees, infrastructure costs — necessitating regular conversions even during bear markets.
However, she revealed that the Foundation is moving beyond simple asset sales. It is now actively exploring advanced DeFi-based financial tools, including:
- Staking derivatives for yield generation
- On-chain lending protocols to optimize capital efficiency
- Tokenization of assets for improved liquidity management
These strategies reflect a maturing financial mindset — one that leverages Ethereum’s own ecosystem to sustain its growth. Instead of merely consuming resources, the Foundation aims to become a responsible participant in the economic layer it helped create.
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Future Directions: Identity, Social Layers, and Micro-App Ecosystems
Looking ahead, Hsiao-Wei highlighted several emerging areas with high potential for innovation:
Digital Identity
Self-sovereign identity solutions built on Ethereum could revolutionize how individuals control personal data. Projects leveraging decentralized identifiers (DIDs) and verifiable credentials are already gaining traction, enabling privacy-preserving authentication across platforms.
Social Applications
The intersection of blockchain and social interaction — often referred to as Web3 social — is another frontier. By decoupling identity from platforms and enabling data portability, Ethereum can empower users to own their digital relationships.
Mini-Program Ecosystems
Inspired by super-app models like WeChat, Hsiao-Wei sees promise in lightweight, composable dApps that function like micro-applications within larger interfaces. These could lower entry barriers for mainstream users while enhancing interoperability.
Together, these trends point toward a future where Ethereum serves not just as a settlement layer, but as the foundation for a new internet architecture — one rooted in user agency and open protocols.
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Frequently Asked Questions (FAQ)
Q: Why does the Ethereum Foundation sell ETH?
A: The Foundation sells ETH primarily to cover fiat-denominated expenses such as salaries and operational costs. While this practice has drawn scrutiny, it remains necessary due to real-world financial obligations.
Q: Is the Ethereum Foundation becoming obsolete?
A: Not obsolete — evolving. Leadership recognizes that as the ecosystem matures, other organizations may take on roles currently managed by the Foundation. This planned transition supports true decentralization.
Q: How is Ethereum improving scalability post-Merge?
A: Through upcoming upgrades like sharding and proto-danksharding, Ethereum aims to significantly increase throughput and reduce transaction costs, making the network more accessible for mass adoption.
Q: What role does DeFi play in the Foundation’s treasury management?
A: DeFi enables more sophisticated asset management strategies, including staking yields, lending income, and tokenized holdings — reducing reliance on direct ETH sales.
Q: Can Ethereum achieve full decentralization?
A: Complete decentralization is an ongoing process. While no system can be 100% decentralized, Ethereum’s multi-client architecture, global validator set, and distributed governance efforts make it one of the most decentralized blockchains today.
Q: What are micro-app ecosystems in Web3?
A: These are small, interoperable applications running within larger platforms — similar to mini-programs in WeChat — allowing seamless user experiences without requiring standalone apps.
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With technical innovation, organizational maturity, and forward-thinking financial practices, Ethereum is positioning itself not just as a cryptocurrency platform, but as the backbone of a new digital economy.