Ethereum-backed EthSystems has launched with support from Bitmine, SharpLink and Consensys CEO Joe Lubin, adding another independent organization to Ethereum’s institutional development network after the Foundation cut 54 roles.
Summary
- EthSystems has launched with backing from Bitmine, SharpLink and Consensys CEO Joe Lubin to build confidential infrastructure for institutional Ethereum.
- The company was spun out of the Ethereum Foundation by former members of its Institutional Privacy Task Force.
- The launch follows the Ethereum Foundation’s recent restructuring as independent organizations take on more ecosystem development roles.
According to an announcement from EthSystems on Tuesday, the for-profit company will build confidential infrastructure for banks, asset managers, and other regulated institutions using Ethereum.
Bitmine and SharpLink, two major Ethereum treasury companies, have backed the venture alongside Lubin, who co-founded Ethereum and later founded Consensys.
EthSystems was spun out of the Ethereum Foundation and was established by former Foundation employees Mo Jalil, Oskar Thorén, and Aaryamann Challani. The three founders previously worked on the Foundation’s Institutional Privacy Task Force.
EthSystems targets confidential institutional finance
The company said it will help financial institutions use public Ethereum without exposing sensitive information such as trading positions, transaction details, or client identities to the full network.
Its work is expected to include privacy systems based on zero-knowledge cryptography, which can verify transactions without revealing the underlying data.
“The business model is simple: bespoke consulting, focused on solving the hardest blockers for institutional adoption,” the team wrote.
“In practice, this means continuing a lot of the work we have been doing, only charging money for it,” it added. “Commercial engagements often require a commercial counterparty.”
Alongside paid consulting, EthSystems said it will continue publishing protocol specifications and contributing to open-source projects.
While working within the Institutional Privacy Task Force, the founders held hundreds of discussions with central banks, regulators, and financial institutions, according to the company.
Their previous work included private bonds using zero-knowledge proofs, confidential stablecoin transfers, private cross-chain settlements and the Ethereum Privacy Map.
“Our mission: help institutions build confidential systems on public Ethereum without giving up what makes Ethereum worth using,” the team wrote.
EthSystems has emerged during a major reorganization of the Ethereum Foundation and its technical teams.
On June 23, the Foundation cut 54 jobs, equal to about 20% of its workforce, after a months-long review of its spending, staffing and long-term responsibilities.
The organization reorganized its work into five divisions covering protocol, access, users, community, and institutional activity. Separate groups continue to manage operations and administration.
The Foundation said the restructuring would allow it to direct staff and resources towards responsibilities that it believes only the organization can perform.
“These decisions were hard, but they are necessary,” the Foundation said in June. “We must be resourced and organized in a way that allows us to focus on the critical work that only EF can, and therefore must, do in the coming years.”
In July, the Foundation also dissolved its Protocol Support team, which had coordinated All Core Developers meetings, network upgrade tracking, Ethereum Improvement Proposal support, Forkcast, and the Ethereum Protocol Fellowship.
Mario Havel, who worked with Protocol Support for more than five years, said he remained at the Foundation but confirmed that the rest of the team had been dissolved.
“I am still part of EF, continuing my work and figuring out what’s most needed in the future,” Havel wrote on X. “However, all of my team, Protocol Support, that I have been part of for 5+ years, has been dissolved.”
Independent Ethereum groups take on new roles
EthSystems joins Ethereum Institutional and EthLabs, two other independent organizations backed by Bitmine, SharpLink, and Lubin.
EthLabs is expected to take on major Ethereum protocol research and development work, while Ethereum Institutional has been positioned as a neutral contact point for financial companies building on the network.
Lubin previously told The Block that he expected at least three organizations to emerge from the Foundation as it concentrated on censorship resistance, open-source development, privacy, and security under its CROPS framework.
“As EF continues doubling down on cypherpunk fundamentals, especially with a focus on individuals, there’s room for an independent for-profit entity that can make different choices in the trade-off space,” EthSystems wrote.
Despite the restructuring, the Foundation’s protocol division remains responsible for Ethereum’s core technology, including privacy, security, decentralization and censorship resistance.
Ethereum developers are also continuing work on the Glamsterdam upgrade, which includes proposed changes to block construction, data access, and network performance.
