The Ethereum Foundation has floated a funding proposal that would redirect part of validators’ annual staking rewards to cover its operating costs, with cuts reaching as much as 10%. Based on the price range cited in the report, the mechanism could raise an estimated $62 million to $125 million per year.
Called the “Validator Redirected Revenue” proposal, the plan would mark a clear break from the Foundation’s past approach. Until now, it has allocated as much as $100 million annually to projects it considers high priority, choosing recipients at its own discretion. That model has drawn criticism inside the Ethereum community, especially because it has relied on selling ETH holdings to raise capital.
Large staking base puts validator rewards at the center
Figures cited in the report show that more than 32% of the total ETH supply is currently staked by validators, with over 30 million ETH locked in the Beacon Chain contract. BitMine is identified as a major participant in that environment, holding a share equal to roughly 5% of total ETH supply and standing out among large ETH holders.
The Foundation also wants to reduce annual disbursements as a share of reserves, lowering that figure from 15% to closer to 5%. In practical terms, the proposal is aimed not only at adding a new stream of revenue but also at easing dependence on reserves and ETH sales.
Reserve decline and weak investments sharpen transparency debate
The report says the Foundation’s reserves have fallen to 102,700 ETH. Over the years, it has backed both niche and prominent projects while managing a portfolio of 21 investments. Most of those positions have underperformed, according to the same report, producing an overall net loss of 82%.
It also notes that Vitalik Buterin and the Foundation supported projects in areas such as biohacking and longevity research, yet many of those efforts failed to reach enough liquidity or broad adoption. After the new proposal surfaced, calls from the community for clearer disclosure around spending plans grew louder.
Research structure shifts as ETHLabs takes on consolidation
According to the report, by 2026 Ethereum is used mainly for stablecoin transfers, DeFi lending activity, and mainstream decentralized exchange trading. Even with ETF momentum and flows from traditional capital, ETH has stayed range-bound near $1,700.
The Foundation said organizations working together over the past year have materially improved the resilience and capacity of the Ethereum ecosystem. It continues to focus on research, individual sovereignty, and long-term goals, while backing new groups to build a more unified ecosystem structure. Research and development work is now being consolidated under ETHLabs, the non-profit research arm focused on Ethereum and ETH initiatives, with the goal of establishing Ethereum as a foundational consensus layer for the global economy. Market reaction was muted after the update, and ETH slipped to $1,655.73.