Ethereum Foundation Halts $3M Grassroots Grants - Strategic Pivot Sparks Community Backlash

Ethereum's community funding arm hits pause on its flagship grant program, leaving developers in limbo as the foundation reallocates resources.

The sudden freeze affects hundreds of builders counting on the $3 million pool designed to fuel grassroots innovation across the ecosystem.

Foundation representatives claim this isn't a budget cut but a 'strategic realignment' - though they've yet to specify what new priorities justify pulling funding from actual builders.

Meanwhile, the crypto elite continue collecting seven-figure grants for 'ecosystem development' while grassroots developers scramble for scraps. Some things never change in decentralized finance.

Why the Ethereum Foundation is pausing grants

The organization said Ethereum’s rapid growth in size and complexity has created pressure to adapt its funding model. Instead of continuing with a system that reacts to grant requests as they come in, the Foundation wants ESP to shift toward proactively backing projects that address strategic needs.

This transition will ensure resources are deployed where they can have the most lasting impact on Ethereum’s usability and resilience.

It added:

“This change will enable us time to redesign in a way that redirects our focus toward strategic initiatives, moving from a reactive model to a more proactive one that also supports the priorities of other EF teams.”

Meanwhile, the Foundation emphasized that its values remain unchanged. These include funding open-source infrastructure, research, and developer tools; supporting community initiatives; and strengthening resources that benefit the wider Ethereum network.

Since its creation in 2018, ESP has evolved from a simple grants program into a broader initiative providing financial and non-financial backing for Ethereum builders.

In 2024 alone, it distributed nearly $3 million across 105 projects, spanning developer tooling, data analytics, education, research, and community events.

Some of the past beneficiaries include Commit-Boost, BundleBear, Web3Bridge, ZK Playbook, and the Ethereum Cypherpunk Congress.