A letter written by a former Ethereum core developer in May 2024 has resurfaced, triggering renewed criticism of the Ethereum Foundation's internal operations. Péter Szilágyi, who led the Geth client from 2015 until his departure in 2025, accused the organization of concentrating power around co-founder Vitalik Buterin while systematically underpaying critical contributors who built the network's infrastructure.
What to Know:
- Szilágyi stated he earned only $625,000 before taxes over his first six years at the Ethereum Foundation, despite the network's market capitalization reaching hundreds of billions of dollars during that period, with no equity or incentives provided.
- The former developer argued that Buterin maintains indirect but absolute control over Ethereum's ecosystem through a small group of 5-10 people who determine which projects receive backing, contradicting the network's stated principles of decentralization.
- The revelations prompted Polygon co-founder Sandeep Nailwal to question his commitment to Ethereum, citing years of perceived exclusion from the foundation and broader community despite major contributions to the ecosystem.
Compensation Disputes and Power Dynamics
Szilágyi made his letter public, outlining three central grievances with the foundation. He described a disconnect between his public role and internal treatment, saying the organization portrayed him as a key leader representing Ethereum's open values while routinely dismissing his input behind closed doors.
The compensation structure drew particular scrutiny.
Szilágyi stated his total earnings during his first six years amounted to $625,000 before taxes, averaging roughly $104,000 annually. He received no equity or performance incentives during this period, he said, even as Ethereum's market capitalization grew to hundreds of billions of dollars. The developer attributed this approach to what he characterized as a deliberate philosophy within the foundation's leadership, which he paraphrased as: "If someone's not complaining that they are paid too little, then they are paid too much."
Szilágyi wrote that he believed this represented one of the foundation's biggest leadership failures. He added that the organization's internal structure deliberately concealed compensation information, suggesting the foundation had fully embraced this approach even if it began accidentally.
The developer also alleged the foundation pressured the Geth team to separate as an independent entity, offering $5 million to facilitate the split. He characterized this as part of a broader pattern in how the organization manages core development teams.
Centralization Concerns and Community Backlash
The centralization critique formed the core of Szilágyi's argument. He described Buterin as holding complete indirect control over Ethereum's direction through influence rather than formal authority. According to Szilágyi, Buterin's opinions, attention and investment decisions largely determined which projects succeeded within the ecosystem.
"I have the utmost respect for Vitalik, but he became a victim of his own success," Szilágyi wrote. "Whether he wants to or not, he is—and has always been—directly defining what becomes successful in Ethereum and what doesn't."
He added: "Ethereum may be decentralised, but Vitalik absolutely has complete indirect control over it."
He identified what he called a "small ruling elite" of 5-10 individuals surrounding Buterin, backed by 1-3 venture capital firms, who shape the network's trajectory. Szilágyi argued this concentration contradicts Ethereum's founding commitment to equal opportunity and open participation. "We set out to create a world of equal opportunity, yet all the most successful projects are directly backed by the same 5-10 people, behind who you can find the same 1-3 VCs," he wrote. "And all this direct control is one happy friend circle of Vitalik. Ethereum's direction always boiled down to your relationship with Vitalik."
The letter sparked immediate reaction across the crypto community. Social media users questioned how the foundation allocated its resources. One user asked: "If the lead dev at the ethereum foundation was making $100k/year for the last 6 years what have they been doing with the billions in eth they've been dumping all over our heads?"
Another post highlighted the contrast between Szilágyi's compensation and Ethereum's scale. The post noted that the lead engineer worked for roughly $105,000 annually before taxes with no benefits, raises or incentives, while Ethereum maintained a market capitalization of $480 billion and the foundation recently sold $43 million in Ether.
Nailwal entered the conversation with his own frustrations.
The Polygon co-founder said the Ethereum community had marginalized his project despite its contributions to the ecosystem. He pointed to what he described as inconsistent treatment: when Polymarket, which runs on Polygon, achieved success, the community claimed it as an Ethereum win, yet Polygon itself remained excluded from being considered a layer-2 solution or part of Ethereum's market perception.
"The Ethereum community as a whole has been a shit show for quite some time," Nailwal wrote. He continued: "The Ethereum community ensures Polygon is never considered an L2 and is never included in the markets' percieved Ethereum Beta...When Polymarket wins big, it's 'Ethereum,' but Polygon itself is not Ethereum. Mind-boggling."
Buterin's Response and Unanswered Questions
Buterin responded to Nailwal with a public statement praising both the executive personally and Polygon's role in the ecosystem. He wrote: "I really appreciate both @sandeepnailwal's personal contributions and @0xPolygon's immensely valuable role in the ethereum ecosystem."
The Ethereum co-founder highlighted the network's hosting of Polymarket, its support for high-scalability applications and early investment in zero-knowledge Ethereum Virtual Machine research. Buterin also commended infrastructure developments like AggLayer. He acknowledged Nailwal's philanthropic work, including leadership of CryptoRelief and the decision to return $190 million in Shiba Inu token proceeds, which funded Buterin's Balvi anti-pandemic initiative.
Neither Buterin nor the Ethereum Foundation addressed the specific allegations in Szilágyi's letter regarding compensation practices, organizational structure or decision-making processes. The foundation has not issued a public statement responding to the resurfaced document.
Understanding the Technical Context
The issues raised involve several key elements of Ethereum's structure. Geth, or Go Ethereum, represents one of the primary client implementations that nodes use to participate in the network. Client diversity remains critical for network security and decentralization. Layer-2 solutions like Polygon process transactions off the main Ethereum blockchain to improve speed and reduce costs, then settle final states on the main chain. Zero-knowledge EVM technology allows these layer-2 networks to prove transaction validity without revealing underlying data, enhancing both privacy and efficiency.
The Ethereum Foundation serves as a non-profit organization that funds development, research and community initiatives. It holds significant Ether reserves, which it periodically sells to fund operations. The foundation's governance structure and spending decisions have faced scrutiny throughout Ethereum's history, though this latest controversy has intensified those questions.
Market capitalization refers to the total value of all tokens in circulation, calculated by multiplying the current price per token by the total supply.
When the source mentions Ethereum reaching "hundreds of billions of dollars" in market capitalization during Szilágyi's tenure, and current figures place it at $480 billion, this provides context for the scale of the network he helped build compared to his reported compensation.
Closing Thoughts
The community now watches for potential responses from the Ethereum Foundation regarding its compensation policies, governance structure and resource allocation.
The controversy arrives at a significant moment for Ethereum, which continues competing with alternative blockchain platforms while managing its transition to a proof-of-stake consensus mechanism and scaling through layer-2 networks. How the foundation addresses these criticisms could influence developer retention, community trust and Ethereum's positioning within the broader blockchain industry. The debate also raises questions about how decentralized networks should govern themselves and compensate the technical contributors who maintain critical infrastructure.