Ethereum Foundation (EF) continues to focus on privacy and security tools, despite criticism from the community, which demands the organization to more actively support the price of ETH. Over the past five years, Ethereum has dropped by almost 60% compared to Bitcoin.
On May 26, Ethereum co-founder Vitalik Buterin spoke about Kohaku—an initiative within EF focused on privacy. According to him, security and confidentiality should become the norm for access level in the Ethereum ecosystem.
This statement came a few days after Buterin published a lengthy text defending the foundation’s strategy. He emphasized that the Ethereum Foundation should remain a research organization, not a tool for supporting the ETH price.
This approach is noticeably different from the position of Aave founder Stani Kulechov. On May 23, he stated that the project is moving to a protocol strategy based on revenue in the next 12 months.
What Did Vitalik Say About Kohaku?
In his post on X, Buterin noted the work of EF participants who have been developing Kohaku for almost a year. According to him, the project focuses on two key things at the Ethereum access level: security, including working without intermediaries and trusted parties, and privacy, both when viewing data and sending transactions.
A participant in the Kohaku Initiative within EF under the nickname Kassandraeth wrote on May 25 that she wants to share more publicly about the project and clear up confusion around it.
“The best way to explain everything is to openly and honestly talk about what I do every day,” she wrote on X.
In the GitHub repository, Kohaku is described as tools for the Ethereum ecosystem with a focus on privacy. It includes libraries for the private protocol Railgun, privacy pools for anonymous transfers, a provider interaction layer, and implementation of ERC-4337 standard accounts with protection against potential quantum threats. Some features are still under development.
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Kohaku is part of a broader privacy development strategy that Buterin is promoting through 2026. In May, he highlighted three main technical directions: account abstraction together with FOCIL, a forced transaction inclusion mechanism, the EIP-8250 proposal with a new nonce system, and work at the access level, which includes Kohaku.
EIP-8250 is supposed to replace the current system with a single nonce for the sender with a two-level model. This is needed to make it harder to track and link transactions from the same account.
Why Is the Ethereum Foundation Being Criticized?
While the community discusses privacy development, internal reshuffling continues within the Ethereum Foundation. In 2026, at least eight key employees have already left or announced their departure, with five of them doing so just in May.
Among the latest are Karl Bick, who worked at the foundation for seven years and participated in the launch of Beacon Chain, as well as crypto-economics researcher Julian Ma, who worked at EF for four years. Both announced their departure on May 18.
On May 25, Buterin made a public statement emphasizing that EF is just one node with a specific task, not the central governing body of Ethereum. He also said that the foundation owns about 0.16% of all ETH in circulation and plans to reduce token sales.
At the same time, the Ethereum Foundation wants to focus on what Buterin calls CROPS: censorship resistance, protection against capture, openness, privacy, and security.
The foundation has long been under pressure from ETH holders who are dissatisfied with the token’s performance. Currently, Ethereum is trading around $2,136, more than twice below last August’s levels. Compared to Bitcoin, the situation has also remained weak for several years in a row.
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However, Buterin himself believes that the Ethereum Foundation should not be involved in supporting the ETH price. In his May 25 post, he again emphasized that chasing only speed and network throughput is a path to mediocrity.
Aave Bets on the Opposite Approach
While Buterin distances the Ethereum Foundation from profit issues, Aave founder Stani Kulechov, on the contrary, emphasizes this. On May 23, he stated that in the next 12 months, the lending protocol will follow a revenue-oriented strategy.
“Stable and predictable income is what proves DeFi can go beyond simple token speculation and become a full-fledged business with a sustainable financial model,” Kulechov wrote on X.
According to DefiLlama, in the past seven days Aave earned $7.96 million in fees, and the total value locked in the protocol exceeds $14 billion.
On May 22, the Aave V4 version surpassed $100 million in total deposits and loans. At the same time, the project is strengthening its focus on institutional lending and developing GHO, the protocol’s own overcollateralized stablecoin.
The difference in approaches clearly shows what the Ethereum community is currently debating. Some believe that privacy, decentralization, and censorship resistance should remain the top priorities. Others are convinced that stable protocol-level revenue will allow the ecosystem to grow and attract users in the long term.
