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The Protocol: Ethereum Foundation Fractures

cryptobizinvest.com January 23, 2025

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Welcome to The Protocol, CoinDesk’s weekly wrap-up of the most important stories in the development of cryptocurrency technology. I’m Ben Schiller, CoinDesk’s Opinion and Features editor.

In this issue:

DAO management tool integration
Drama of the Ethereum Foundation
Stablecoin USDh comes to Bitcoin
$25 million grant program for DePIN

Network News

DAO GOVERNANCE PLATFORM ACQUIRES KARIMBAL: Agora, a blockchain governance startup, is set to acquire its competitor Boardroom. The company frames the acquisition as a strategic move to improve governance within the broader Ethereum ecosystem, citing expectations of renewed growth in decentralized governance due to President Trump’s promise of regulatory clarity for the blockchain industry. “2025 is the year we make good governance the standard for all Ethereum protocols,” Agora co-founder Yitong Zhang told CoinDesk. Agora was founded in 2022 by Zhang, Charlie Feng, and Kent Fenwick. The trio began work on governance tooling at Nouns DAO, one of the buzzier blockchain protocols to emerge from the DAO and NFT hype cycle of 2021. Agora was founded on the premise that token governance is central to the value of crypto protocols. It aims to provide user-friendly, open-source governance tools for DAOs like Uniswap and Optimism, both of which currently use Agora to organize token holders and hold governance votes. blockchain governance. Boardroom has gradually moved from an Agora-style DAO tooling software to a data feed — akin to a “Bloomberg” for crypto management data. Agora declined to disclose how much it paid to acquire Boardroom. Boardroom employees have been offered roles at Agora, and Boardroom’s founder, Kevin Nielsen, will stay on as an advisor. “There’s no plan to deprecate” Boardroom, according to Zhang. Instead, the Agora team will keep both platforms working and work with users to determine how the tools can be gradually integrated. Read more. – Sam Kessler

ETHEREUM TROUBLE: Konstantin Lomashuk, the founder of the Lido staking protocol, teased his intention to build a “Second Foundation” to advance the Ethereum ecosystem. Over the past few days, Ethereum co-founder Vitalik Buterin outlined plans for a major restructuring of the Ethereum Foundation (EF), the nonprofit organization responsible for supporting Ethereum’s development. In a series of posts on X (formerly Twitter), Buterin shared details of the restructuring, which he said will streamline decision-making processes and address inefficiencies. The announcement drew criticism, with some arguing that Buterin’s central role in the restructuring process undermined Ethereum’s ethos of decentralization. EF has long been investigated for its own centralizing influence. Over the past year, the organization has faced increasing pressure to define a clearer vision for Ethereum’s future as competing networks like Solana make moves. Read more. – Sam Kessler

BITCOIN GETS A NEW STABLECOIN: The developers of USDh, a stablecoin built on Bitcoin layer 2 Stacks, have completed a deal to bring about $3 million in liquidity to the token. Decentralized finance (DeFi) protocol Hermetica has secured liquidity, which it says will make it the largest stablecoin on Stacks, by partnering with Bitcoin lending protocol Zest. The two plan to offer yield in USDh by lending against sBTC, the bitcoin-backed bridging asset that users can use to put their bitcoin wealth into the Stacks ecosystem. The initial boost in liquidity could create a short-term window of higher yields, Hermetica said, with annual percentage yield (APY) projections as high as 50%. It currently offers an average APY of 18%, Hermetica said in an emailed announcement Wednesday. Stablecoins play an important role in the crypto economy, giving users a way of holding their assets in a token that is not prone to such dramatic ebbs and flows in value, as it is pegged them in a fiat currency (usually the US dollar). The provision for stablecoins will therefore naturally be an important development in the evolution of Bitcoin into a network that can support DeFi capabilities, a trend that has gained momentum over the past few years. It should be pointed out, however, that the $3 million in liquidity that USDh provides is small compared to the dominant stablecoins in crypto. USDT and USDC have market caps of over $138 billion and $51 billion respectively, highlighting the relative infancy of the Bitcoin DeFi sector. Read more. – Jamie Crawley

DEPIN GRANT PROGRAM: World Mobile, a decentralized wireless network, has announced a $25 million grant program aims to promote Decentralized Physical Infrastructure Network (DePIN) projects. Tenity, an early-stage investor and global leader in innovation and startup acceleration programs, is a partner in the initiative, which will make its six international hubs available. “By partnering with Tenity, we are ensuring that the World Mobile Chain Grant Program not only funds projects but provides the guidance and resources necessary to drive measurable, impactful change,” said Micky Watkins, CEO of World Mobile Group. $25 million offers funding starting at $5,000 and has a focus on decentralized communications, on-chain governance, and the tokenization of real-world assets. World Mobile is an EVM-compatible “Layer 3” built on Base. Read more.