The Ethereum Foundation (EF) is planning to establish a formal conflict of interest policy after facing criticism regarding two well-known developers who joined EigenLayer as advisors.

Aya Miyaguchi, EF’s executive director, responded to the issue on social media, stressing the need to uphold credible neutrality within the organization. She acknowledged the community's concerns and affirmed the foundation's commitment to maintaining trust.

Miyaguchi stated:

“It’s evident that relying solely on culture and personal judgment has been insufficient. We’ve been working on a formal policy to address this for some time and will be speeding up this process. An update will be provided soon.”

Controversy

The controversy began on May 18 when crypto trader Jordan Fish, also known as Cobie, publicly questioned Ethereum co-founder Vitalik Buterin about the ethics of EF developers receiving significant financial incentives from projects built on the Ethereum network.

Cobie’s tweet specifically cited EigenLayer, leading to widespread social media discussions about potential conflicts of interest. He questioned:

“How do you feel about Ethereum Foundation core developers or researchers taking substantial packages from projects built on Ethereum to become ‘advisors,’ when those projects may have conflicting incentives with Ethereum, now or in the future? For example — hypothetically, let’s say, EigenLayer.”

Following Cobie’s tweet, EF researcher Justin Drake revealed his advisory role at EigenLayer on May 19, stating he received a substantial incentive in Eigen tokens, valued in the millions over three years.

This disclosure intensified concerns about transparency and potential conflicts between EigenLayer and EF. Drake mentioned that the information had been public since May 3 and that the timing of Cobie’s tweet was coincidental.

On May 21, another EF researcher, Dankrad Feist, also disclosed his advisory role at EigenLayer. Feist, known for his work on “danksharding,” confirmed he received a significant allocation of EIGEN tokens and assured the community his advisory role would not influence his views on EigenLayer's development.

Conflict of interest concerns

These disclosures have sparked questions about potential conflicts of interest, especially considering the systemic risks EigenLayer might pose to Ethereum. EigenLayer is a platform allowing users to deposit and “re-stake” Ether from various liquid staking tokens to secure third-party networks or validated services.

Several blockchain experts have voiced concerns about potential centralization and additional burdens on stakers due to restaking services.

Drake assured the community he would reinvest or donate all proceeds to beneficial projects within the Ethereum ecosystem and pledged to resign if EigenLayer’s direction conflicted with Ethereum’s interests.

Feist, in his disclosure, emphasized his independent stance and focus on risks and decentralization. He wrote:

“I am taking this position personally, not representing the Ethereum Foundation, and focusing on risks and decentralization. I do receive a significant amount of tokens from this position. I believe they won’t influence my positions on core protocol development, but the community should be aware so they can hold me accountable.”

The EF’s initiative to formalize a conflict of interest policy is a crucial step in addressing the community’s concerns and maintaining trust within the ecosystem. Further updates on the policy are expected soon.