Ethereum won the builders. What the base layer collects is still being decided
BlackRock tokenized fund shares on Ethereum L1. JPMorgan and Coinbase went to Base. Robinhood built its own rollup. All of it settles on a base layer that captured 4.9 percent of the fees its applications generated last quarter, and whose maintenance now runs on staking yield.
BlackRock on the base layer, JPMorgan and Coinbase on Base, Robinhood on its own rollup, and an unresolved argument about who pays for the anchor
Disclosure: the author holds BMNR shares and a position in Ether.fi, both of which appear in this article, along with ETH. Full disclosure below.
The Ethereum Foundation cut 54 jobs on June 23, roughly a fifth of its staff, and sorted what remained into five clusters [1][18]. Within three weeks, three new organizations had claimed pieces of the work it gave up. The same two companies turn up in the funding of all three.
They are Bitmine Immersion Technologies and SharpLink, the largest and second largest corporate holders of ether. Bitmine reported 5,847,611 ETH on August 24, about 4.8 percent of a circulating supply near 120.7 million [2]. SharpLink holds roughly 863,020 [2]. Joseph Chalom, SharpLink's chief executive and formerly BlackRock's head of digital assets, told The Defiant that the money behind the first of the new organizations comes partly from staking rewards on the backers' own ETH [3].
So Ethereum's development is being refinanced out of the yield on a concentrated block of the asset, in the same weeks the network began telling governments that what separates it from a corporate chain is having no controlling counterparty.
What the Foundation gave up
The reorganization ended a process that ran all year. Tomasz Stanczak stepped down as co-executive director in February. A mandate published in March recast the Foundation as one steward among several rather than the ecosystem's primary builder, built around censorship resistance, resilience, openness, privacy and security [4]. Hsiao-Wei Wang resigned on June 18, leaving Bastian Aue as effectively the sole executive [3]. Counts of the departures differ, nine by CoinDesk's tally [4] and at least eight by The Defiant's [3], and either way it is the largest turnover in twelve years.
Ethereum Foundation Management
Alongside the job cuts came a roughly 40 percent reduction in the 2026 operating budget, part of a shift to an endowment model that lowers annual spending from about 15 percent of the treasury toward 5 percent by 2030 [3]. The five clusters are protocol, access, user, community and institutional [1]. The protocol cluster's published mandate is unusually blunt about what it is not for: hardening the base layer, not making Ethereum more marketable, and not making it easier to turn into a financial rail run by intermediaries [1].
The people inside read the shrinking as strategy, not symptom. Aue published an execution plan the same week committing the Foundation to treat MEV extraction as a structural threat, make privacy a protocol default, and move its own payroll into ETH and Ethereum-native stablecoins [26]. He dropped any pretence of neutrality about direction, calling the Foundation partisan for something whose neutrality is the whole point [26].
Trent Van Epps, who coordinated Foundation core development until April, had warned of a funding gap within three to nine months and put annual core development costs at about $30 million [3]. Bitmine chairman Tom Lee dismissed the warning and said profit-seeking corporate stakers would underwrite Ethereum's future instead [3]. It is now clear what he meant.
Who picked it up
Ethlabs was announced on June 22, an independent nonprofit run by five former senior Foundation contributors, among them Ansgar Dietrichs, Barnabe Monnot and Julian Ma. Funders named at launch were SharpLink, Bitmine, Ethereum co-founder and Consensys chief executive Joe Lubin, Anchorage Digital, Octant and SNZ [5]. Lubin framed the shift as Ethereum gaining several stewards in place of one [5]. Ethlabs said its agenda stays independent through external grant administration, with transparency reports for funders but no control over technical priorities, and all research published openly [5].
Ethereum Institutional followed on July 1, a nonprofit offering banks and asset managers a front door to the ecosystem, led by David Walsh, who previously ran the Foundation's enterprise work, and backed by Bitmine, SharpLink and Lubin [6]. Standard Chartered welcomed it as filling a communications gap with the largest financial institutions [7]. EthSystems arrived on July 14 and breaks the pattern: a for-profit spun out of the Foundation's privacy work, selling confidential transfers and private bond issuance to banks on the logic that commercial engagements need a commercial counterparty. Bitmine, SharpLink, Lubin and SNZ back that one too [8].
Its funders concede the overlap with the Foundation is real and competitive, and none will name a figure. Chalom argues the structure prevents capture: observer seats only, neither company on the board, grants administered externally, accounts audited annually. "This is the opposite of a conflict of interest," he said [3].
The argument being made to governments
On the same day Ethereum Institutional launched, the Foundation's Global Policy Strategy team published a primer for governments and institutions [9]. It is the clearest statement yet of the case against the corporate chains, and it does not hedge. Blockchains sit on a spectrum, the report argues, with open ownerless protocols at one end and, at the other, networks that are effectively corporate products run by a company or a small group of insiders. "These products can fail the way companies fail" [9].
Ethereum Foundation Global Policy Strategy
The supporting data, from an OpenZeppelin risk assessment current to March 2026, gets specific. Ethereum has never gone down since 2015 while every other network in the report had between one and seven outages, and it was secured by around $76 billion in staked ETH [9][20]. In one case the report identifies, the corporation behind a major blockchain controls about 42 percent of the token supply and extends that control to validator selection [9].
The timing is not accidental. Stripe shipped Tempo to mainnet in March, a payments chain that launched with three organizations as validators, two of them payment processors, and Circle raised $222 million in an ARC presale in May [10]. The counterparty section reads as a direct answer to both. Build where nobody can reprioritize the chain for commercial advantage.
Where the builders actually went
Wall Street did not choose between Ethereum and the corporate chains. It deployed on both, and the split is informative.
Assets that have to be credible went to the base layer. On August 4 BlackRock minted twelve tokenized share classes across six existing money market funds directly on Ethereum mainnet, using JPMorgan's Kinexys platform for the token layer [22]. The $311 billion attached to that launch is the assets under management of the whole Institutional Cash Series range as of June 30, not the amount tokenized, which has not been disclosed [23]. It had already put on-chain share classes of a Treasury liquidity fund on Ethereum, alongside a reserve vehicle for stablecoin issuers under the GENIUS Act [22].
Things that have to be cheap and fast went one layer up. JPMorgan's JPMD, a tokenized bank deposit rather than a stablecoin, runs on Base [21]. On August 24 Coinbase put tokenized Apple, Nvidia, Meta and Alphabet shares live on Base for eligible non-US users, each a direct claim on a share held by the custodian Alpaca in a bankruptcy-remote structure supervised in Abu Dhabi, with Chainlink feeds so they can be posted as collateral in Base lending markets [24]. Robinhood built its own rollup on Arbitrum technology and moved its tokenized equity business onto it [11].
That second set is where the walled garden question lands, and it is less tidy than either side allows. Base and Robinhood Chain are corporate chains and Ethereum rollups at once. Their sequencers are single companies, and Base showed what that concentrates when it went down twice within hours in June [11]. But their settlement is Ethereum, they pay Ethereum for data availability, and their users can leave for Ethereum. Tempo and Arc are the different case, separate layer 1s that borrow Ethereum's standards without settling to it [10]. A bank choosing Base rents neutrality from Ethereum and buys convenience from Coinbase. A bank choosing Tempo rents no neutrality at all.
The structural case for the neutral layer is simpler than either camp makes it. Stripe would like everything to settle on Tempo. JPMorgan would like everything on its own rails. Circle would like everything on Arc. None of them gets that, because no serious institution runs its business on a competitor's chain, and what is left is a venue none of them owns [26]. Erik Voorhees, asked why he built Venice AI on Ethereum, said it was not even a question [26]. Ethereum is becoming the public layer businesses build on, not because most activity happens there, which it does not, but because whatever has to hold regardless of who runs the venue keeps getting anchored there.
The bill for being the base layer
Being the anchor does not pay well.
The on-chain analyst who writes as Tanaka published a breakdown at the end of July that has framed the argument since. Applications across Ethereum and its rollups generated $1.79 billion in fees in the second quarter of 2026, of which the base layer captured $88.4 million, or 4.9 percent [25]. Rollups were running about 1,270 user operations a second against roughly 20 on mainnet [25]. Blob fees, the mechanism meant to route rollup growth back down, are not closing the gap: a recent seven-day blob burn came to about 0.22 ETH [25].
Read it the other way, which is how most people building here read it, and the arithmetic is a choice rather than a verdict. Cheap execution was the design goal, not an accident. Blob space arrived in 2024 to push rollup costs down, and Fusaka extended it in December 2025 [25]. The base layer gave up fee revenue on purpose, and the return was deferred rather than surrendered. The levers remain inside the protocol, gas limits and blob capacity and issuance among them, and the period that produced the 4.9 percent produced the position it bought: Ethereum holds roughly 65 percent of the tokenized asset market and about 53 percent of stablecoin market capitalization [27]. Cheap execution and dominant share are one fact from two ends, and a quarter of fee data does not settle which end matters.
Set that beside the funding story and the halves lock together. If the base layer cannot pay for its own maintenance out of fees, the maintenance gets paid out of issuance, and issuance accrues to whoever holds the stake. Ethereum did not decide to have its development financed by its largest stakers. It arrived there by scaling in a way that moved the fees one layer up.
The counterparty the argument does not name
Run that test on Ethereum's own numbers. In an exhibit filed with the SEC on July 20, Bitmine stated it had staked more ETH than any other entity in the world, reporting 4,917,189 staked ETH [12]. By August 24 that was 5,067,309, with projected annualized staking revenue of $330 million [2]. Total staked ETH stood at 41.41 million on August 4, about 34 percent of supply [13][19], and 41.78 million three days later [14]. Divide one by the other and a single listed company runs close to 12 percent of Ethereum's staked base through its own validator network.
That is not a violation of anything, and Lido at roughly 23 percent is larger. But it is the kind of exposure the Foundation's own report says institutions are normally required to disclose, justify and manage.
It is also a thesis rather than a corner. Bitmine has bought ETH every week for 59 consecutive weeks since June 30, 2025, and Lee's case is that an economy run by autonomous agents needs a settlement layer no participant controls [27]. The Foundation, meanwhile, holds about 0.16 percent of the supply, while Buterin keeps roughly 90 percent of his own net worth in ETH [26]. An institution holding almost none of the asset, and a founder holding almost all of his own, is an awkward shape for a capture story.
The second-order effect matters more than the first. The organizations now doing Ethereum's protocol research, its institutional outreach and its bank-facing privacy engineering share a funding base with the largest staker on the network, and in Ethlabs' case that funding comes partly from the yield that stake produces [3]. The replacement funding is a claim on validator income.
August: the yield the model runs on
On August 4 a draft proposal appeared on GitHub that would burn a rising share of every validator's consensus rewards as the staking ratio climbs, reaching a full deduction at 60.25 million ETH staked [14]. Six authors, including Foundation researcher Justin Drake, filed it as a fix for the concentration problem above: the issuance curve leaves a positive yield at any ratio, so it never stops paying people to stake more, and they project more than 70 million ETH staked by January 2028 on an unchanged path [14].
It circulated under two numbers, 8361 and 8363, the first self-assigned and the second issued by the editors [14]. At the current ratio it would cut all-in validator income from about 2.68 percent to about 1.19 percent over eighteen months [14].
The response came from the businesses on the other side of the trade. Aave founder Stani Kulechov argued that a yield trending to zero breaks ETH borrowing, and that a zero-yield regime filters out everyone staking for return while leaving the field to the regulated, coercible operators the proposal fears. "Ethereum should not be punished for its growth," he wrote [14]. Ether.fi's Mike Silagadze attacked the process. Validator signaling came back 99.77 percent against on roughly 83,000 ETH, about 0.2 percent of the staked base and twelve entities in all [14].
At the All Core Devs call on August 6 it was left off the inclusion list for Hegota, with a recorded suggestion that its author consider withdrawing it [14]. That is short of rejection, and inclusion was never on the table at that stage. It is the first real test of whether a network financed by staking yield can vote to cut staking yield, and so far the question got tabled.
What a portfolio reads from this
None of this makes Ethereum a corporate chain. The distinctions in the Foundation's report hold: no operator, more than five independent client implementations, a validator set spread across jurisdictions, uptime unbroken since 2015 [9]. What has changed is where the open question sits. It has moved out of the protocol, which is more robust than it was, and into the economics around it. A network whose development budget rests on validator income has acquired a constituency with a financial interest in one branch of its monetary policy, and in August that constituency won its first round.
The bull case and the bear case are the same facts read in opposite directions. Everybody building serious financial infrastructure came to Ethereum, on the base layer or one level above it, and the base layer collected almost none of what they generated. One camp calls that a deliberate subsidy with the return deferred, and points to a network anchoring most of the tokenized economy while charging almost nothing for it. The other calls it the business model, and points to base-layer fees down from around $30 million a day at their peak to single digit millions [3] and layer 2 tokens at record lows [11]. Glamsterdam, which raises the gas limit floor from about 60 million to 200 million and converts into revenue only if demand arrives to fill it [17], is in final testing with sources split on the quarter [15][16]. It, the blob market and the issuance fight are three simultaneous arguments about which camp is right.
The framework this publication has applied to earlier episodes fits. In the bank war the question was never which money you held but whether the infrastructure around it still worked. In the panic of 1907 it was whether anyone had the standing to coordinate a rescue. The 2026 version is more mundane and more answerable: who pays for the maintenance, what they earn from the asset they maintain, and what happens when that income goes to a vote. Those are disclosure questions rather than accusations, and the filings answer them.
Sagix
Sagix
Disclosure: The author holds shares in Bitmine Immersion Technologies (BMNR), the company whose stake concentration is analysed above, and a position in Ether.fi, whose chief executive is cited here opposing the issuance proposal. The author also holds ETHplus, an RToken on Ethereum mainnet whose backing is exposed to ether and to Ethereum staking yield, and RSR vote-locked to the ixEDEL and ETHplus on Ethereum mainnet. Every position named here would benefit from staking yield staying where it is. Readers should weigh the analysis with that in view.
Educational purpose only: This content is provided exclusively for educational and historical research purposes. It should not be construed as investment advice, financial planning guidance, policy recommendations, or official economic analysis. Any contemporary parallels or policy discussions are presented as academic analysis, not recommendations for action. Historical patterns provide context for learning but do not predict future financial system outcomes or investment performance.
AI-assisted research disclosure: This analysis was researched and written with substantial assistance from artificial intelligence technology (Claude, Anthropic). While extensive efforts were made to verify all statistical claims, citations, and institutional analysis against authoritative sources, readers should independently verify any information before relying on it for academic, professional, investment, or policy purposes.
Accuracy and liability limitations: While extensive effort has been made to ensure accuracy through authoritative sources, the authors make no warranties about completeness, accuracy, or currency of information. Interpretation involves scholarly judgment and academic debate. Economic data may contain revisions, measurement inconsistencies, or reporting variations across time periods and institutional sources. The authors and publisher assume no responsibility for errors, omissions, or consequences arising from the use of this information, including any errors resulting from AI assistance. Users assume full responsibility for decisions or actions taken based on this content.
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Methodological note: This analysis synthesizes primary corporate filings, protocol documentation, foundation publications, and established financial media reporting. The numbered citation system allows readers to verify specific claims against original sources rather than relying on secondary interpretations.
Contemporary financial systems: References to modern financial systems, cryptocurrency protocols, or DeFi mechanisms are made for educational comparison purposes only. These comparisons do not constitute endorsements, recommendations, or predictions about the performance or suitability of any current financial products or services.
Publication information: Last updated: August 25, 2026 | Series: Sagix news | Publisher: The Genesis Address LLC
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