In the crypto world built on the concept of decentralization, the Ethereum Foundation is seen as the guardian of technology and value neutrality, but a recent split sparked by core developer Péter Szilágyi has shattered this appearance of trust.
Disbanding the Geth team, EF falls into internal disputes
Geth (Go Ethereum) is the most commonly used execution client of the Ethereum network. About 41% of the nodes rely on it. The stability and decentralization of the network are highly dependent on its development quality. Recently, Péter Szilágyi, a core developer of Ethereum and a developer of the Geth client, mentioned in a review that many years ago he had proposed to issue small grants to authors of Geths key dependent components (such as go-leveldb) to encourage them to continue to maintain the relevant code. At that time, he hoped to give a grant of $10,000, but was told that he could only allocate $500. If the amount exceeded this, he had to sign a contract and deliver results.
However, according to Szilágyi, during the same period, the Ethereum Foundation was able to provide Parity with a $5 million grant without any additional conditions, on the grounds that Ethereum needs a second client because Geth is unreliable. This became an imbalance that Szilágyi could not get rid of: the Geth team had to rely on frugality to maintain the critical infrastructure of the protocol, while its competitors could easily obtain large subsidies.
Over time, this imbalance gradually evolved into a crisis of trust. Szilágyi revealed that the foundation had formed a new Geth team within Nethermind and made it clear that this was a completely independent, uncooperative fork. More importantly, the original Geth team was not informed in advance, but only learned about it after Szilágyi discovered the matter himself.
In response to Szilágyi’s accusations, Tomasz K. Stańczak, co-executive director of the Ethereum Foundation, publicly responded: “There are currently no plans to remove Geth. It is an excellent client software and is also contributed to the security of the protocol by an excellent team. We will continue to maintain and support Geth and are committed to making it better and faster.”
Tomasz is also the leader of Nethermind, which is now the most important infrastructure in the Ethereum ecosystem and is one of the top five execution clients along with Geth, Besu, and Erigon.
But this statement is obviously very different from what Szilágyi disclosed. Szilágyi even publicly challenged the EF leadership, Dare you deny it? He also named several foundation executives who had privately proposed to let the Geth team become an independent company and separate from EF, but the idea was rejected three times by the team.
Szilágyi said that Tomasz had approached most of the developers who were still in Geth in recent weeks, telling them that they could start interviewing other companies because he felt that their salaries were too high, and asked them how many people would leave if their salaries were cut in half. Come on, denial! Remember my vacation? Yes, that was after I had a one-on-one conversation with @0x stark about the secret second Geth team I discovered. I was fired by the foundation within 24 hours.
“I dare you, the entire Ethereum Foundation, to stand up and say: You didn’t offer us $5 million to spin off? Or, the Foundation didn’t ask us at least three times if we wanted to form a company and go our own way, and me, Felix, and @mhswende said no? I dare @hwwonx to deny our conversation in February.”
Banteg, who is also a developer, asked Szilágyi why he didnt accept the offer of a $5 million severance package and go it alone. Szilágyi responded that as a developer, we are not good at running a company, and we dont have the infrastructure or team support. The whole thing will eventually fail.
According to Szilagyi, the intensity of the situation goes far beyond the disagreement over team management or resource allocation, and directly touches the foundation of the power and trust system within the Ethereum ecosystem.
As a key module for maintaining the normal operation of the Ethereum network, Geth should receive continuous and stable support, but the reality is just the opposite: it has neither received the resources that match its importance nor enjoyed the long-term trust of the foundation. For Szilágyi, this institutional cold reception has gradually eroded his initial confidence in this cause - a decentralized experiment that once excited him and devoted himself to it has now gradually become disappointing.
From enthusiasm to disappointment, Péter Szilágyi’s journey with Ethereum
Péter Szilágyi is a core member of the Ethereum Foundation and the head of development of Geth, the most important execution client of Ethereum. If he had not resigned from the Ethereum Foundation, this year would have been his tenth year working at Ethereum, and that was also his first job after graduation.
In 2015, Szilágyi accepted the trial task proposed by Ethereum core developer Jeff Wilcke: This is a mess, you come and fix it, and you can ask me if you have any questions. In this way, he began to participate in the development of Geth.
Szilágyi majored in computer science in college, and his research background was in distributed systems, with a particular passion for networks. During his masters degree, he focused on building a distributed hosting platform. Dissatisfied with the inefficiency and fragility of manual configuration, he aspired to develop a computing system that can run self-organized without human intervention. After graduation, I didnt have to work on blockchain, but I was looking for work that could make computers run on their own, and then I came across Ethereum, Szilágyi described his encounter with Ethereum.
In 2021, the Geth team took a group photo. Szilagyi is on the right.
In an interview with Bankless, Szilágyi said that in the last few years of working on the Geth team, he was mostly tinkering. In the early years, his motivation was to create, release, and toss, but now that driving force has almost faded. Slowly it turned into a sense of responsibility: he realized that he was maintaining an extremely valuable network, and he was one of the few people who really understood it and could maintain it. This kind of work is indeed not that interesting, but it is fulfilling, and you will get a sense of satisfaction from participating in it.
When asked in a 2023 interview about the trajectory of his relationship with Geth, Szilágyi responded, “There have been ups and downs over the years. There have been times when I was really frustrated and wanted to slam the table and walk away. The worst was probably during the COVID-19 pandemic, which was really tough. But now I still enjoy this job.”
However, just one year later, Szilágyi became an outsider in the Ethereum community.
In fact, this is not the first time that Szilagyi has criticized certain issues in the Ethereum community. In July last year, he criticized Ethereum for going astray and that the research team had completely accepted all centralized ideas as long as they could be verified. On the surface, it was decentralized verification, but in essence it was centralized control. His strong words attracted widespread attention in the Ethereum community and sparked a heated debate about the core principles of the Ethereum network.
A month later, Szilagyi posted a video complaining about the crypto industry, wondering if he had chosen the wrong industry. He said, For example, SpaceX, they sent a rocket to Mars? Humanity progressed. They failed to successfully launch the rocket and it blew up? Humanity learned a lesson and still progressed. All results lead to progress.
Crypto is a casino for fools by comparison (apologies to the few exceptions). Prices go up? Great, buy a sports car sometime. Prices go down? Lives ruined. What good for humanity?
In my opinion, it’s time for this industry to start creating something actually useful that people will want to use, or it should go out of business. At least Bitcoin is trying (and failing) to be a safe haven asset. But the others are just selling shovels, and there’s no sign of a gold rush at all.”
It now appears that Szilágyi may have encountered some unhappy things within the Ethereum Foundation at that time.
Szilágyi and Tomasz, the current director of the Ethereum Foundation, don’t seem to get along well. Nethermind once stopped storing Ethereum’s historical data together with Besu. This decision triggered Szilágyi’s public criticism, believing that it was irresponsible and could mislead users. This was also one of the triggers for Szilágyi to withdraw from Ethereum. “Since even the core developers are maximizing their interests relative to other developers, why bother to make it better? I am deeply disappointed with everyone involved.”
On November 16, 2024, Szilágyi announced that he would temporarily leave the Geth team due to vacation. However, as mentioned above, Szilágyis vacation was due to the discovery that the Ethereum Foundation secretly funded a second Geth development team within Nethermind. He was fired by the Foundation within 24 hours for threatening to resign and undermining team morale after a one-on-one meeting with Foundation member Josh Stark.
The process of cutting costs is not dignified
This public split essentially touches on the dilemma of Ethereum’s current governance structure. On the one hand, the Foundation emphasizes that “multi-client consensus” is crucial to the security of the protocol and emphasizes that Geth cannot be allowed to dominate alone; on the other hand, Geth has been the main force in protocol execution for many years, and its infrastructure quality and team experience cannot be easily replaced.
In February of this year, Aya Miyaguchi, executive director of the Ethereum Foundation, announced that she would move to the newly created position of Chairman, a change that put an end to months of community dissatisfaction with the leadership and direction of the Foundation.
In June, the Ethereum Foundation announced the layoff of some RD staff and reorganized the original research team into a new department called Protocol, concentrating resources on three major technical directions: L1 expansion, blob expansion, and UX improvement. The official positioned this move as an optimization of resource allocation. On the one hand, some RD staff were laid off, especially those teams that have remained in the theoretical stage for a long time; on the other hand, a stricter accountability mechanism was introduced to require the rapid transformation of research results into actual outputs.
Related reading: Cost reduction and efficiency improvement = layoffs + selling ETH? What signals does the EF Treasurys new policy send ?
It can be said that the Ethereum Foundation has been committed to transforming the entire team since it was ridiculed by the public in the second half of last year, but the reform is bound to encounter a period of pain. According to the new policy, EF will determine the allocation ratio of fiat currency and ETH based on the operating expenditure ratio × buffer period model, and maintain the annual expenditure at a high level of 15%. The foundation pointed out that 2025-2026 will be a critical stage for the ecosystem, and resources need to be concentrated to promote the implementation of technology at the protocol layer, including L1 expansion, blob technology and UX optimization.
EF said that 2025-2026 will be a critical window for promoting the implementation of the agreement, and it is expected to maintain an annual expenditure of 15% and set a 2.5-year fiat currency buffer period. This means that the foundation needs to convert about 37.5% of the treasury into fiat currency to support short-term and medium-term investment.
Nowadays, there are continuous favorable policies, which is a good thing for the application layer on Ethereum. But when it comes to governance, we may need to give the Ethereum Foundation a little more time to adapt to the new stage.
