The latest funding crisis in Ethereum sparks intense debate, focusing on whether staking rewards should be taxed.

ChainCatcher reports, according to Cointelegraph, that Ethereum is currently embroiled in an intense governance debate over the source of funding for core development. Last Friday, former Ethereum Foundation contributor Trenton Van Epps warned that, as previous support programs are exhausted and Foundation spending is reduced, the core developer ecosystem could face a “slow-burning funding crisis” within three to nine months, with maintaining more than ten clients, research, and coordination teams requiring approximately $30 million per year.

The crux of the debate centers on a proposal by Kleros co-founder Clément Lesaege for “validator redirect income,” suggesting that 0% to 10% of validator rewards be redirected to an ecosystem funding pool. Based on the current amount staked, this could generate around 50,000 to 70,000 ETH per year. The proposal has faced broad opposition, with critics warning it could entrench the power of large validators and blur the boundaries between operations and governance. Some community members previously argued that Foundation funds were sufficient for 30 years of operation, but actual decisions show the Foundation is proactively reducing expenditures and promoting diversified funding models.

On Monday, EthLabs, a nonprofit organization founded by five former Ethereum Foundation researchers, announced its establishment, aiming to directly fund development through major ETH holders. On Tuesday, Ethereum founder Vitalik Buterin indicated that the Foundation is reducing its budget by about 40% as per existing policy, and has recently laid off 54 staff members.