The funds will be an award for development teams working on the network’s software.
This donation revealed the increasing interest in applying more decentralized financing procedures.
The Ethereum Foundation revealed that a series of projects operating in the decentralized finance (DeFi) sector, along with the exchange Kraken, donated at least $ 1.5 billion to rush the development of the Ethereum 2.0 execution layer.
Compound Grants, Lido, Synthetix, The Graph, and Uniswap Grants made a donation estimated at $ 250,000 each to support open source development teams working on technical updates to improve the network.
The funding round will benefit developers working on Ethereum software compatible clients such as Best, Erigon, Geth, Nethermind, and Nimbus. These devs will receive the gesture of the projects that coexist in the Ethereum ecosystem, which is an ecosystem that shows interest in the success of the number two network according to its market capitalization.
Ethereum Foundation expressed through a statement in the official blog that they will strongly show their support as these [development] teams adapt and grow alongside the wider community.
This ecosystem is working hard on an ambitious project that may include a transition process to turn its blockchain into a powerful virtual processing machine. A process that appears in the crypto-environment with the name Ethereum 2.0.
This transformation includes leaving behind the Proof of Work (PoW) consensus algorithm to transition to the Proof of Stake (PoS) mechanism. It is a metamorphosis that would meet its completion in several phases that have been put in place already since last year when the Beacon Chain got activated.
Once eth1 and eth2 get merged in stage 2, there would be an ecosystem that will work between the execution layer and the consensus layer. In this sense, the new financing that will complement the one already assigned by the Ethereum Foundation will support clients of the execution layer (previously Eth1).
These clients will keep bringing critical network infrastructure after the merger, as Ethereum moves toward a proof-of-stake consensus system. The platform’s strong support will continue as these teams adapt and climb up in parallel with the wider community, details the official blog post.
Decentralized financing for Ethereum
According to the Foundation, this first round of financing by these large Ethereum projects intends to “reduce the risks that arise from dependence on a single team or entity.”
For this reason, we are working on the search for more decentralized financing mechanisms for Ethereum’s public goods. This decision is one more step that allows groups of participants to bring direct support to the development and maintenance of the client, the note adds.
If the plan succeeds, all this hard work and efforts will lead to the community enjoying tons of benefits that Vitalik Buterin previously highlighted last May. The network’s co-creator believes that Ethereum’s security will be higher, and stronger with the proof of stake.
By Jenson Nuñez
