Vitalik Buterin sees a problem. Core developers on public blockchains like Bitcoin and Ethereum work below market rates to build critical infrastructure. They earn less than they could in private indu
Vitalik Buterin sees a problem. Core developers on public blockchains like Bitcoin and Ethereum work below market rates to build critical infrastructure. They earn less than they could in private industry.
Bitcoin Core developers have overseen the project for years, implementing scaling improvements. Ethereum's infrastructure has grown through multiple independent teams collaborating on solutions to the network's scaling challenges.
Plasma exemplifies this approach. Buterin and Joseph Poon, who co-authored Bitcoin's Lightning Network, developed it as a scaling and privacy solution. The system moves computation off the main blockchain to increase transaction capacity.
These projects generate no revenue. They exist to solve one problem: the Ethereum network can't handle enough transactions. The developers working on them need paychecks. Startups launching ICOs raise millions in weeks and can hire developers at market rates. Open-source infrastructure projects offer no token, no quick capital raise, no investor money. Teams working on them watch their budgets contract month by month.
Buterin announced plans in September to address the gap himself. He committed to redirect all his advisor shares from OmiseGo and Kyber Network to support second-layer infrastructure. He laid out the rules: "100 percent open source, no baked-in profit scheme (incl ICO token), must be good."
One fund has limits. Without ICO revenue, teams struggle to hire developers and sustain work on core problems.
EtherDelta emerged this week as the network's most-used application. It processes 40,000 transactions a day, accounting for 14 percent of all network activity. The platform never ran an ICO. Traders and investors use it to swap coins directly, without intermediaries.
Buterin took notice of the model. The team doesn't charge for deposits, withdrawals, or placing orders. A trader who executes a swap pays 0.3 percent. EtherDelta explained the technical reason: "Placing an order doesn't involve an Ethereum transaction. Placing an order involves signing a message, which doesn't cost a gas fee. This means that placing an order on EtherDelta is completely free: there's no Ethereum transaction fee, and there's no fee if the order trades. The one and only platform fee EtherDelta charges is a 0.3% fee paid by the person executing an order (paid in the instrument being sold)."
The model works. The EtherDelta team now pulls in enough money to pay developers and cover operations.
Buterin said other infrastructure projects could copy the approach. By charging small transaction fees, they'd generate revenue without needing an ICO or compromising their open-source values.
