The Protocol: EIGEN Riches Tempt Ethereum Devs, Even as ETF Approval Nears

There's been tension among members of the Ethereum developer community – even though the ETH price is mooning due to growing anticipation that U.S.

Rising anticipation that U.S. regulators might soon approve spot ether exchange-traded funds has sent the price of ETH soaring – up 21% this week in its best performance since August 2021.

But beneath the surface, there's been tension in the Ethereum developer community over the largest smart-contracts blockchain's future and progress toward decentralization. The sniping became especially acute with the revelations this week that two of the Ethereum Foundation's biggest stars have accepted multimillion-dollar token incentive packages from EigenLayer, the pioneering restaking protocol that has been flagged as possibly posing a systemic risk to Ethereum.

The dust-up began when Péter Szilágyi, a core developer on Ethereum, lamented on Twitter the lack of progress in solving some of the blockchain's most pressing issues. Among them: Maximal extractable value, or MEV – essentially, the use of sophisticated trading bots to frontrun user transactions at the point of execution. Szilágyi's despair reached a crescendo with a sarcastic suggestion that it was “futile to fight against MEV, so might as well lean hard on it, right?”

As we noted in last week's issue of The Protocol, even U.S. government officials now appear to characterize MEV as standard operating procedure on the blockchain.

Dankrad Feist, the Ethereum Foundation researcher who is the namesake of "danksharding" and a central figure in this week's drama in the Ethereum community, retweeted Szilágyi's post with the comment, "This is such a lazy take if you can't also tell me what your supposed solutions are that let local block producers extract MEV."

A back-and-forth ensued, and then Ethereum co-founder Vitalik Buterin chimed in, tweeting that "I'm really proud that Ethereum does not have any culture of trying to prevent people from speaking their minds, even when they have very negative feelings toward major things in the protocol or ecosystem." Buterin, who is known to write long, interrupted his work on a project in Kenya to bang out a 3,000-word-plus essay breaking down the issues, concluding: "I also do not think that the situation is anywhere near as hopeless as Peter's tweets imply."

Buterin's commentary on the MEV dust-up touched off an entirely separate donnybrook. The pseudonymous crypto influencer Cobie responded to Buterin's tweet by asking the very pointed question of how he felt about "core developers or researchers taking life–changing $ packages from projects built on Ethereum to become 'advisors,' when those projects may have conflicted incentives with Ethereum, either now or in the future."

At first it wasn't quite clear what the comment referred to. But then, as reported by CoinDesk's Margaux Nijkerk, a top Ethereum Foundation developer, Justin Drake, disclosed that he had taken on a role advising EigenFoundation, with "a significant token incentive which could easily be worth more than the combined value of all my other assets (mostly ETH)," and a value of "millions of dollars of tokens vesting over 3 years." EigenFoundation supports the restaking protocol EigenLayer, a controversial project partly because experts have warned of its potential systemic risks to the Ethereum blockchain.

Shortly after that, Feist confessed that he, too, had accepted a paid role at EigenFoundation. The news set off a debate on crypto twitter about whether advising the EigenFoundation would constitute a conflict of interest. "Even if you pinky promise to not let this cloud your judgment, and do it on a personal capacity, that's impossible," wrote Lefteris Karapetsas. One clever jokester deadpanned that the Ethererum researchers were "restaking themselves now."

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Top Picks From Protocol Village This Week: Sui, StarkWare, Gnosis, COTI, Bitfinity

Five key blockchain tech upgrades and news from our Protocol Village column this week.

Throughput-Latency graph comparing Mysticeti-C performance with state-of-the-art consensus protocols (Arxiv)

1. Sui Foundation, supporting the Sui blockchain built around the Move smart-contracts language, announced the successful testnet deployment of Mysticeti, "a new consensus protocol that reduces consensus time on Sui by 80% to 390 ms, making it the fastest consensus layer in the industry," according to the team.

2. StarkWare, the main developer firm behind the layer-2 blockchain Starknet, shared Wednesday plans for its own zero-knowledge rollup compatible with the existing Ethereum infrastructure, a setup commonly known as a zkEVM. The zkEVM, called Kakarot, already in testing, will be available via the Starknet Stack, a set of software tools that make it easier for developers to spin up their own customized application-specific chains.

3. Gnosis unveiled "Metri," an on-chain self-custodial wallet operating