Good evening,
Tonight, I’m discussing the newly announced nonprofit, Ethereum Institutional, which is backed by the same two funders of EthLabs, Bitmine and Sharplink.
Ethereum Institutional is a nonprofit focused on accelerating Ethereum’s institutional adoption.
For longtime readers of my newsletter, this mission statement should ring a bell, as it’s oddly similar to that of another institution-focused Ethereum organization, Etherealize.
Below, I explain why these two organizations differ yet are likely to face the same challenges in pursuing their missions.
Let’s get into it.
Yours truly,
Christine D. Kim
P.S. As a reminder to readers, the visibility of my posts has changed. Free subscribers will now receive full posts in their inboxes a few days after publication, while premium subscribers will get early access to my insights.
As a reminder, the two-month summer special offer is still available. You can try a free premium subscription to my Substack until August 31 using this offer code.
🌕 To read the full newsletter, make sure you are signed up for a free or premium subscription. Free subscribers will receive today’s full post in their inboxes next week. Premium subscribers can read it in full now. Become a subscriber:
🌓 Interested in being a featured sponsor of this newsletter? Learn more about sponsorship opportunities available for ACD After Hours:
🌑 I also run a research and advisory firm called Protocol Watch for businesses building on Bitcoin and Ethereum. Learn more about how I can help your business stay ahead of protocol changes:
The year is 2026, and Ethereum, after more than a decade of development and evolution, is still a protocol largely stewarded by a single organization, the Ethereum Foundation (EF).
However, as I discussed last week, this may be starting to change. Finally.
The EF announced in a blog post last Tuesday that it is downsizing and intentionally creating space for other stakeholders to take the helm in stewarding Ethereum's evolution.
So far, Bitmine and Sharplink, the two largest ETH treasuries in the world, and the companies with the most capital on the line to see Ethereum succeed, have stepped up in a big way to back Ethereum.
Last Monday, Bitmine and Sharplink announced the creation of a new non-profit research and development (R&D) organization, EthLabs, led by former EF researchers and developers.
EthLabs is the first serious attempt to diversify Ethereum core protocol R&D away from the Foundation and start a new hub for this activity.
If successful, EthLabs and others like it could prove that the Foundation's efforts, though valuable, aren’t what make or break Ethereum’s value—a highly contested truth about the protocol's decentralization and maturity that stakeholders can finally prove in practice, not in theory.
That’s the ambitious and value-add vision behind EthLabs.
This week, Bitmine and Sharplink announced the creation of a second non-profit organization, Ethereum Institutional.
Unlike EthLabs, the vision behind Ethereum Institutional is unclear, given the myriad of teams just like it that already exist and have a spotty track record of success.
Publicly unveiled on Monday, July 1, Ethereum Institutional is a non-profit focused on accelerating the institutional adoption of Ethereum, its Layer-2 protocols, applications, and the overall ecosystem.
As stated on their website:
Ethereum Institutional is the front door to institutions. It leads engagement, education, and coordination, ensuring Ethereum is consistently represented in high-stakes institutional decision-making. It builds trusted relationships with banks, asset managers, and public institutions, translates Ethereum's value proposition into institutional terms, and surfaces real-world requirements.
The mission is awfully similar to that of Etherealize, another organization launched early last year with backing from the EF to accelerate the institutional adoption of Ethereum.
When Etherealize launched, the company stated on X:
Introducing Etherealize, an institutional marketing and product arm for the Ethereum ecosystem. Our goal? To accelerate adoption by bringing institutions to Ethereum: the digital economy of tomorrow. First, Etherealize is a hub for content - for TradFi, for ETF issuers, and for the broader public to learn about the Ethereum economy. Ethereum is ambitious - it’s the operating system for the global economy. We’ll help spread Ethereum’s potential.
The main difference between Ethereum Institutional and Etherealize is that Etherealize is a for-profit entity focused on developing revenue-generating products for institutions.
It’s been nearly a year since Etherealize launched, and the organization has yet to announce or unveil any products built for institutions on Ethereum. While the company has certainly fulfilled its mandate as a hub for content on why institutions should build on Ethereum, it’s unclear what Etherealize is actually building.
Early in the company’s evolution, it was speculated that Etherealize would build institution-focused Layer-2 infrastructure, but whether that is still in the works remains unclear, especially after Vitalik Buterin’s statements back in February that Layer-2s are not extensions of Ethereum, nor will they be the way the protocol scales in the long term.
Alongside Ethereum Institutional and Etherealize, the EF has also stated that it will continue to focus on showcasing Ethereum and its potential to institutions, even as the organization downsizes. In last week’s blog post announcing their latest restructuring efforts, the EF wrote:
We believe that many enterprises, governments, and nonprofits will realize that their incentives favor serving users in ways that strengthen self-sovereignty .... In addition to direct engagement, the institutional cluster will pursue these ends by helping to establish and thoughtfully communicate best practices, standards, reference architectures, and educational materials for institutional adoption.
This means there is now a mix of non-profit, for-profit, and non-profit-sponsored-by-for-profit businesses, all directing resources toward marketing Ethereum to the institutional audience.
However, as has been the case for Etherealize since its launch, it’s unclear what use cases or products these teams are marketing Ethereum for.
The current mission statement of Ethereum Institutional, which still seeks to market Layer-2s to institutions, and the fact that new Layer-2 protocols like Robinhood Chain are still being actively developed on Ethereum suggest that Layer-2s are the leading drivers of Ethereum’s institutional adoption.
However, the vision behind Layer-2s from a protocol perspective has shifted dramatically over the last year.
It is now widely recognized by the community that Layer-2s, at least in their current designs, are not value-additive to Ethereum. They’re value-extracting. Further, the technical and financial motivation for building them remains largely experimental, with few examples of success.
Their value accrual back to Ethereum has also proven to be marginal, and developers have since pivoted to focus the next immediate upgrade, Glamsterdam, almost entirely on scaling Layer-1 Ethereum and driving usage back to Layer-1.
But, without Layer-2s, it is unclear what use cases or infrastructure institutions should then use Ethereum for.
Launching a new institution-focused Ethereum organization before Ethereum has a clear institutional use case is like putting the cart before the horse.
It is difficult to see how groups such as Ethereum Institutional, Etherealize, and the EF's Institutional cluster can succeed if Ethereum’s value proposition is not well-defined or supported by live protocols demonstrating that value.
Thus, these organizations will likely serve a different role for the time being as communication funnels, relaying potential institutional needs for Ethereum back to core development teams, such as EthLabs and the EF Protocol cluster.
This is a critical and necessary role that may result in meaningful changes to the Ethereum protocol, its value, and its development roadmap. However, it is not their stated role to market and educate institutions about Ethereum.
It’s the role of seeking out an institutional use case for Ethereum.
Important work, no doubt. Just one that does not presume the use case is already there or built.
Find the answer to this question in my write-up above!
All Core Developers Execution #240 call summary and transcript (Forkcast)
New Hegota EIPs proposed since last Thursday’s ACD call:
Deadline for Hegota Ethereum Improvement Proposal submissions is August 6 (X, Nixo Rokish)
ENS founder, Nick Johnson, under scrutiny for taking unilateral control over DAO funds and operations (The Defiant)
🙂 Thank you for reading! What did you think of today’s issue? Please share your feedback by leaving a comment.
😁 If you like what you read today, consider sharing it with a friend who might also enjoy the content.
🥳 Finally, if you’re a premium subscriber, don’t forget to join the subscriber chat. It’s an exclusive space to discuss and debate the future of Ethereum and Bitcoin with fellow readers and yours truly.
Newsletter credits:
Special thanks to Shinhye Kim for the illustrations in this newsletter.
Comments
Nothing yet. Say the first thing.
Sign in to join the conversation.