Trent Van Epps has warned that Ethereum is facing a roughly $20 million annual funding gap for core development, as the Client Incentive Program (CIP) is set to expire in April 2026 without a clear replacement.

In a June 26 CoinDesk Markets Outlook interview with Jennifer Sanasie, the former Ethereum Foundation ecosystem lead and Protocol Guild co-founder said the network requires about $30 million annually to sustain core protocol work. Current funding mechanisms fall well short, leaving a structural deficit with no scalable solution in sight.

Van Epps framed the issue as more than a financial shortfall, calling it a key test of Ethereum’s decentralized governance model—specifically whether the ecosystem can maintain critical infrastructure as the Ethereum Foundation (EF) continues to step back.

EF Scaling Back, Pressure Building

The Ethereum Foundation is accelerating its “subtraction strategy,” reducing its central role and shifting responsibility to the broader ecosystem.

This includes plans to cut annual treasury spending from roughly 15% of reserves to about 5% by 2030. The EF has also reduced its workforce by around 20% and seen multiple senior departures, including two co-directors within months, intensifying uncertainty around governance and coordination.

The most immediate concern is the end of the CIP, a four-year initiative that provided ETH-based incentives to client teams like Geth, Erigon, and Lighthouse. Intended as a temporary bridge, it is ending without a sufficiently scaled successor.

Protocol Guild and the Funding Gap

Van Epps co-founded Protocol Guild to help address the issue, distributing donated tokens to core Ethereum contributors through long-term vesting without granting governance influence.

Supported by projects such as Lido, Uniswap, and ENS, the Guild has distributed nearly $40 million over four years—about $10 million annually—far below the $30 million needed, leaving a persistent $20 million gap.

He identified a “free rider” problem at the core: DeFi protocols, stablecoin issuers, and Layer 2 networks extract significant value from Ethereum’s infrastructure without being required to fund its maintenance.

A Defining Moment for Ethereum

The next three to nine months could prove decisive. Without durable funding solutions, Van Epps warned, Ethereum risks gradual erosion of its developer base.

Potential consequences include the loss of key contributors, reduced client diversity, slower bug fixes, and delays to major upgrades such as quantum-resistance.

Despite these concerns, Van Epps remains confident in Ethereum’s long-term position, citing its leadership in DeFi, stablecoin settlement, and EVM adoption as durable advantages. Against that backdrop, the $30 million annual requirement appears modest relative to Ethereum’s roughly $200 billion market cap and trillions in annual stablecoin activity.

Looking ahead, he envisions a more distributed model where the Ethereum Foundation focuses on research and coordination, while independent entities take on funding, infrastructure, and growth—an approach aligned with Vitalik Buterin’s view that the EF is not meant to act as a permanent steward.

Van Epps also emphasized the need for a clearer narrative around ETH’s value capture to attract institutional support capable of replacing CIP-style funding.

Ultimately, the clearest signal of success may not come from governance changes, but from developer retention—whether the teams maintaining Ethereum’s core infrastructure remain intact over the next year.