Why the Ethereum Foundation's Model Is Being Copied (And Why It's Flawed)

The Foundation is not a strategy. The EF succeeded because it launched into a greenfield market with a first-mover protocol. Copycats like Aptos, Sui, and Sei attempt to replicate the structure without the unique historical timing or the established developer mindshare that Ethereum possesses.

Grants create mercenaries, not communities. The EF's grant programs, now mimicked by Arbitrum and Optimism, often fund projects that chase funding cycles rather than solve core protocol problems. This results in a proliferation of low-utility dApps that fail to bootstrap sustainable ecosystems.

Proof-of-Stake alignment is missing. The EF's model worked with a broad, decentralized validator set. New chains with centralized token distributions and venture capital backers like Solana or Avalanche lack the same credible neutrality, making their foundation-led governance a performative facade.

Evidence: Layer 2 networks like Polygon and Arbitrum now spend more on developer marketing and grants than on core protocol R&D, a sign the model incentivizes superficial growth over technological depth.

Copycat Governance Fails. New L1s like Aptos and Sui mimic the Ethereum Foundation's bureaucratic structure to signal legitimacy. This imports a slow, consensus-based process for core development that is antithetical to the high-velocity iteration required for blockchain infrastructure.

Bureaucracy Stifles Protocol-Layer Innovation. In a fast-moving ecosystem, the speed of execution determines survival. While Uniswap and Optimism can ship upgrades in weeks, foundation-governed L1s require months of debate, creating a structural disadvantage against agile, corporate-led chains like Solana.

The Evidence Is In Deployment Cycles. The average time for a EIP to move from draft to mainnet exceeds 18 months. Contrast this with Arbitrum's Nitro upgrade, which was developed and deployed by Offchain Labs in under a year, demonstrating the iterative advantage of focused teams over diffuse foundations.

Grant dependency creates misaligned incentives. Projects optimize for proposal approval, not market validation, leading to zombie infrastructure with no users. This is why Optimism's RetroPGF and Arbitrum's STIP are shifting to results-based funding.

The research bottleneck throttles execution. Ethereum's multi-year consensus upgrades (e.g., The Merge, Dencun) are necessary for decentralization but irrelevant for an L2 needing to ship a high-performance sequencer today. Solana and Monad prioritize execution-layer pragmatism over theoretical perfection.

The model ignores capital as a tool. Pure grant ecosystems cede the capital efficiency war to VC-backed chains like Avalanche and Sui, which use treasury funds for strategic liquidity mining and developer acquisitions.

Evidence: The Ethereum Foundation's ~$1B treasury funds core protocol R&D, but its most impactful scaling innovations—like rollups—were built by for-profit entities (Arbitrum, Optimism, StarkWare) operating on a different, product-driven model.

The EF's primary export is legitimacy, not software. Its deliberate, academic process creates a Schelling point for coordination that venture-backed entities like Solana Labs or Ava Labs cannot replicate. This social consensus is the real asset being copied.

Copycats ignore the time-value of execution. Ethereum's decade-long head start allowed for methodical development. New chains like Aptos or Sui adopting this model face existential competition from faster-moving, app-chain ecosystems like Cosmos or Avalanche subnets.

The model centralizes protocol imagination. Foundation-led roadmaps (e.g., Ethereum's rollup-centric vision) can stifle bottom-up innovation. Contrast this with the permissionless experimentation seen in the Solana or Polygon CDK ecosystems, where builders dictate the pace.

Evidence: The 'Merge' required 8 years of research. A new chain following this cadence would be obsolete before launch, outpaced by iterative L2s like Arbitrum and Optimism that ship upgrades quarterly.

Committee governance creates bottlenecks. The EF's model centralizes critical protocol decisions (like EIPs) within a small, opaque group. This process is slow, political, and fails to scale with the ecosystem's complexity, unlike the permissionless upgrade paths of Optimism's Fractal Scaling or Arbitrum's DAO-driven governance.

It stifles permissionless innovation. True L1/L2 sovereignty requires core protocol components to be forkable and recomposable. The EF's tight coupling of R&D and execution prevents this, whereas chains like Solana and Celestia separate these layers, enabling faster, competitive iteration on the base protocol itself.

Evidence: The Ethereum Merge took years of committee consensus, while a Solana validator client fork (like Firedancer by Jump Crypto) or a Celestia data availability fork can be deployed by a single entity, demonstrating the speed of decentralized R&D.