• the Ethereum Foundation (EF, Switzerland-based non-profit) created to support the Ethereum blockchain ecosystem: to “enable and coordinate the development of Ethereum”

• Ethereum = decentralized and programmable public blockchain

• initial treasury 💰: 8.3% of Ether from the initial crowdsale

• the 3 basic principles of the EF:

  1. subtraction
  2. long-term thinking
  3. stewardship of values

In a world where organizations intentionally or unintentionally tend towards greater scope, the EF’s approach is, distinctively, one of self-minimization.

[the organization seeks to] resist the natural tendency of organizations to grow and accumulate value within themselves

• distribute opportunities, rather than capture them matter less, not more be happy 👏🏻, not territorial (when other orgs create value they could have generated)
• standard companies are growth (”0 to 1”) and monopoly-driven; even some non-profits depend on grants and grow their service (and eventually teams) and tend towards accumulation

Maybe it’s something like a loose law of human nature: once formed, organizations generally like to grow: to perpetuate their existence as an end in itself, accumulate resources, and become ever-more important to-and depended upon-by the ecosystem.

• 👎🏻 downsides of growth culture:

  • for businesses: cost, bloat
  • for the ecosystem: concentrated and unchecked power

• alternative economic models:

  • new macrostructures
  • counter-growth philosophy

While none can be a panacea, and new efforts generally have rough edges, we can still learn from bold, imperfect attempts at prefriguring something different.

• the four ways in which Josh Stark from EF makes sense of the philosophy of subtraction:
  1. actively resist the natural process of organizational accumulation and excessive identity/ego-building
  2. a process of pushing things outside oneself; distribute the money, expertise, power, and prestige to others
  3. decenter the organization as an agent; instead of them being the primary actor to confront a problem, EF asks: “[paraphrased] how can the ecosystem/other organizations fix this and how can we support them?”
  4. a vision of a future where more distributed, pluralistic set of smaller organizations coordinate to serve vital functions; prioritize coordination over competition

the four-latered structure of the EF (from the article)

The four-layer structured of the EF

• the further out the layer, the more funding and decision-making is ellocated to external parties; e.g., one idea developed in an internal team is pushed out towards better suited teams in the ecosystem, and viceversa

• in-house teams: build Solidity, organize the EF conference

• ecosystem grants: handles decisions on grant awards to outside teams

• delegated domain allocators: teams that work with the EF on higher-level decisions on how to give funding

• third party funding: external groups that allocate grants from the EF treasury without EF’s input (e.g., ETHGlobal, 0xPARC, Nomic Foundation)

• the EF asked 5 different teams to build consensus clients for the Proof-of-Stake upgrade (instead of building one in-house):

  • ➕ gives users more choice
  • ➕ adds resilience through redundancy (if one client is buggy, there’s 4 more to choose from)
  • ➕ encourages competition
  • ➕ allows external stakeholders to make decisions on core upgrades

  equivalent: OpenAI asks 5 other teams to build ChatGPT, Canon asks other companies to build lenses. Organizations build the components they need, instead of coordinating other projects “for the sake of their principles and long-term vision.”

• measuring subtraction

  • some possible metrics such as media mentions over time
  • the EF stays quiet about themselves (also a subtraction-oriented practice)
  • some would say the EF has grown in importance, including their planned involvement with the Merge, Surge, Verge, Purge, and Splurge
  • current ecosystem structure is rather a hub-and-spokes not distributed, since EF still plays a central role in coordinating different players and funding
  • EF has grown, but Ethereum has grown dramatically

• ➖ of subtraction:

  • speed: increased chaos and misalignment caused by parallel developments by multiple heterogeneous parties

  However, subtraction might still be faster in the long term. [The EF is] growing a diverse set of overlapping institutions that lead the ecosystem resilience and sustainable coalitions. [They are not susceptible to getting] taken down by regulators, or fail as a company due to interpersonal conflict […] The point of a public blockchain is to be infallible, and the implicit promise of stability from the EF invites people to build faster-moving applications on top of the steady rock of the technology. The technical reliableness holds true: Ethereum’s never been hacked, and as far as anyone can tell, the Merge upgrade happened perfectly.

• applying subtraction to other organisations?

  • unusual in all spaces
  • the Gates foundation’s mandate: spend all money within 20 years of Bill and Melinda’s deaths
  • subtraction would probably lead to smaller and more organizations in a given ecosystem, including coordinator orgs

  The optimistic outcome is that we’d have more players, more choice, dynamics of co-creation rather than competition, and an overall more resilient and pluralistic ecosystem.

• subtractions (seems to) requires mutual goodwill between players or an organization with an abundance of options, cash reserves

  • the EF’s core developers and leaders are not rallied against, people see them as trustworthy which is important (despite the trustlessness philosophy of blockchains)

  ❤️‍🩹 EF employees have worked substantially below-market wages for years in order to contribute to the core protocol.

• organizations that hope for widespread adoption of their work, e.g., the ones oriented around setting protocols and standards (Fido, Farcaster) may be well-suited for a similar philosophy. @raluca also gift economies heh

  Credible neutrality and minimal involvement increases trust and therefore adoption.

• encourage external organizations to join, make decisions, capture some value

• imagine TCP/IP being invented by a private company

• “Thielian narrative” (monopoly) vs. philosophy of subtraction for tech companies

  Subtraction means more opportunities for collaboration with others with different comparative advantages.

  The overall ecosystem of peer-to-peer exchange products is likely more pluralistic, and better off for this choice.

  @raluca channels & the philosophy of subtraction

A Subtractive Tech Company (@raluca revisit once ctzns mission is drafted)