Fundstrat Global Advisors co-founder Tom Lee told CNBC on Tuesday that Ethereum’s evolving funding structure is a healthy sign for the network, arguing that the asset is finally moving beyond its original reliance on the Ethereum Foundation. Lee’s comments come as the price of ETH hovers near $3,200, roughly 30% below its 2021 all-time high, while developer activity and ecosystem funding continue to diversify.
Why the Foundation Model Mattered
The Ethereum Foundation, a non-profit entity established in 2014, has historically been the primary source of grants and funding for core protocol development, research, and ecosystem projects. In 2023 alone, the foundation allocated over $50 million in grants, according to its annual report. Critics, however, have long argued that this centralized funding bottleneck slowed decision-making and created a single point of dependency for the network’s roadmap.
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Lee’s observation reflects a broader trend: independent venture capital firms, protocol-owned liquidity programs, and decentralized autonomous organizations (DAOs) are now funding the majority of new Ethereum-based projects. Data from Galaxy Research shows that venture capital investment in Ethereum-related startups exceeded $2.6 billion in 2024, with less than 5% originating from the Ethereum Foundation.
A More Distributed Financial Backbone
“The fact that the funding is coming from so many different places now — it’s not just one foundation writing checks — that’s a sign of a mature ecosystem,” Lee said during the interview. He contrasted this with earlier years when the foundation’s treasury, which once held over $1.6 billion in ETH, was the dominant financial engine for the network.
This shift has practical implications for the network’s resilience. If the foundation were to face regulatory or financial headwinds, the broader Ethereum development community would no longer be critically dependent on a single entity. Multiple Layer-2 teams, including Arbitrum and Optimism, now operate their own treasuries worth hundreds of millions of dollars, funding independent research and development.
Market Implications and Investor Sentiment
For investors, the decentralization of funding sources is often viewed as a bullish signal. It suggests that the network’s long-term viability is not tied to the fortunes of one organization. Lee’s endorsement carries weight among retail and institutional audiences; Fundstrat is one of the most widely followed research firms on Wall Street, and Lee himself has a track record of correctly calling Bitcoin’s price cycles.
However, the transition is not without friction. The Ethereum Foundation has faced criticism in recent months for its slow disbursement of funds to certain Layer-1 research teams, leading to talent migration to competing chains like Solana and Avalanche. The foundation’s executive director, Aya Miyaguchi, acknowledged these challenges in a blog post in January, stating that the organization is “actively exploring ways to streamline grant processes.”
What This Means for the Network’s Future
The maturation of Ethereum’s funding model aligns with the broader institutionalization of cryptocurrency. As pension funds, endowments, and asset managers increase their exposure to digital assets, they demand infrastructure that is not reliant on a single nonprofit’s balance sheet. Lee’s comments suggest that Ethereum is passing that test.
Whether this shift will translate into price appreciation remains an open question. ETH has underperformed Bitcoin over the past 12 months, rising 45% compared to Bitcoin’s 70% gain. But for Lee, the structural change in how Ethereum is funded is a more important long-term metric than any short-term price chart.
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