Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Polygon co-founder Sandeep Nailwal has publicly questioned his loyalty to the Ethereum ecosystem, citing a profound lack of support from the Ethereum Foundation despite years of contributing significant scaling infrastructure. This criticism emerged alongside revelations that former Geth lead developer Péter Szilágyi received minimal compensation over six years, sparking broader concerns about the Foundation’s treasury management and talent retention strategies.
Polygon Founder Questions Ecosystem Loyalty
Nailwal expressed his growing doubt about his commitment to Ethereum, highlighting that Polygon had built vital scaling infrastructure and hosted successful applications like Polymarket without direct support from the Ethereum Foundation or its community. He claimed this moral loyalty potentially cost “billions of dollars in Polygon’s valuation.”
Marc Boiron, CEO of Polygon Labs, reinforced this, stating that “Polygon PoS is a customer of Ethereum” that pays substantial fees to the network. He argued the Foundation should “embrace” rather than “shun” contributors, especially as the community refuses to classify Polygon PoS as a Layer-2, causing market perception issues.
Nailwal noted that friends had suggested Polygon declare itself an L1, which he believes would likely result in a two- to five-times higher valuation. Despite these frustrations, he promised a “final push that might just revive the entire L2 narrative” in the coming weeks.
Developer Compensation Crisis Exposes Foundation Mismanagement
Péter Szilágyi, who managed Ethereum’s primary execution client, Geth, for six years, revealed he earned just $625,000 before taxes, with no benefits, raises, or incentives. He described the role as “a bad financial decision” and warned of “perverse incentives, conflicts of interests and eventual protocol capture” due to underpayment.
This revelation aligns with September Protocol Guild data, which showed Ethereum core developers earn 50% to 60% below market standards, with a median base pay of $140,000 compared to average market offers of $359,000. Many contributors also lack equity or token grants, unlike those in commercial crypto ventures.
Critics across crypto Twitter questioned the Ethereum Foundation’s treasury management, especially after it reportedly sold 10,000 ETH worth $43 million while core developers remained underpaid. Concerns were raised about potential grant abuse, where some projects receive over $200,000 for minimal work, while the Foundation holds a massive ETH treasury without staking its holdings.
Ecosystem Builders Migrate
Vitalik Buterin responded to Nailwal’s criticism, acknowledging Polygon’s “immensely valuable role in the ethereum ecosystem” and praising its contributions, including hosting Polymarket and advancing ZK-EVM technology. Buterin also noted Nailwal’s personal efforts, such as voluntarily returning $190 million from donated SHIB tokens to fund open-source biotech programs.
However, the broader discontent has led some developers to explore other ecosystems. Solana co-founder Raj Gokal openly offered collaboration with Nailwal. One development team reported moving from Ethereum and Base to Solana after four years of limited success, generating $3.5 million in revenue within 48 hours of their Solana launch.
This team characterized the Base and Ethereum ecosystems as “closed dinner parties” with inner-circle dynamics, while praising Solana for its open, builder-first support. In a related development, the Ethereum Foundation has begun decommissioning the Holesky testnet this week, with node operators scheduled to shut down infrastructure over the next ten days.
Outlook
The recent criticisms from key contributors like Sandeep Nailwal and Péter Szilágyi highlight growing concerns over the Ethereum Foundation’s support mechanisms and financial stewardship. These issues pose significant questions about talent retention and the future trajectory of the Ethereum ecosystem as competing Layer-1 solutions attract disillusioned developers.
