The privacy team from the Ethereum Foundation (EF) has announced its spin-off into an independent commercial entity — EthSystems. The project aims to implement blockchain solutions for institutional clients, a logical step amid growing demand for private transactions from large capital.
Funding and Team
The startup has received support from Ethereum co-founder Joseph Lubin, as well as from BitMine and SharpLink. The founders are former EF employees Mo Jalil, Oscar Thoren, and Aryamann Challani, who previously worked in the foundation's institutional privacy group. This underscores the team's deep expertise in blockchain data protection.
Technology and Business Model
EthSystems plans to develop tools based on zero-knowledge proofs (ZK-proofs). These solutions will allow banks and asset managers to conduct large transactions on the Ethereum network while maintaining the confidentiality of trading positions and client data. The company's business model is based on paid consulting and custom development. EthSystems representatives emphasize that large businesses need a commercial counterparty, not a non-profit foundation. At the same time, the startup will continue to publish protocol specifications in open access, preserving the spirit of Ethereum's openness.
"Privacy is not just an option, but a key requirement. Without data protection, large financial organizations will not transition to blockchain," said EthSystems CEO Jalil.
Before the public launch, the team worked on open-source code for a year. Protocols for private transfers, bond issuance, and identity systems have already been presented.
Context of Ethereum Restructuring
The launch of EthSystems comes amid a large-scale restructuring of the Ethereum Foundation. Last month, the foundation cut 20% of its staff and reallocated resources across five main areas. Alongside EthSystems, other independent entities — EthLabs and Ethereum Institutional — have emerged in the ecosystem. This signals decentralization not only of the blockchain itself but also of its governance infrastructure.
Recall that in June, a proposal was discussed on the Ethereum Research forum to redirect up to 10% of validator staking rewards to fund the ecosystem.
My analysis: The emergence of EthSystems is not just a commercialization of EF's developments, but a sign of the Ethereum ecosystem's maturity. Institutional investors have long awaited solutions that allow them to work with public blockchains without disclosing sensitive information. If EthSystems succeeds in creating truly convenient and secure ZK tools, it could become a catalyst for a new "institutional supercycle" for Ethereum.