AUSTIN, Texas — How much ETH does Joseph Lubin, the founder of Ethereum incubator ConsenSys, hold? No one knows, and he’s not saying.

“No, I wouldn’t disclose that personally,” Lubin, once called the “Daddy Warbucks” of Ethereum, said on stage at Consensus 2022. The brilliant researcher at Galaxy Digital (and former CoinDesk alumna) Christine Kim was the latest person to pose that question to Joe on stage in Austin, Texas.

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Indeed, Lubin’s holdings have never been more relevant as Ethereum nears the end of a multi-year development to overhaul its consensus algorithm. Proof-of-stake – the new security protocol, the heart of what these trust-minimization machines do – will secure the largest smart contract blockchain by market cap, Ethereum, by having people post collateral.

Or as Kim said, “Capital is what directly influences who can participate in building blocks, preposing transactions and creating network consensus.” In other words, what’s at stake is the prospect of Lubin controlling the world’s most used blockchain.

On stage, Lubin was “comfortable” saying his holdings have “never been even close to even half of a percent.”

This differs from previous estimates, which at one point placed Lubin’s ownership between 5% and 10% of the total circulating ether supply. Forbes cited those figures when naming him the second-richest person in crypto in 2018, and what U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler believes, though the data is almost assuredly out of date.

Lubin, who previously founded a quant hedge fund and served as Goldman Sachs’s (GS) vice president of technology, was with Ethereum from the beginning. He was likely one of the principal buyers of ETH during the network’s $18 million initial coin offering (ICO). It’s also likely he, as Ethereum’s chief operating officer, received a healthy cut of the estimated six million ether the Ethereum Foundation distributed to “early project contributors.”

But there are several complicating factors, like the fact that Lubin has spent the past five years funding, often out of his pocket, hundreds of Ethereum startups and open-source protocols through the venture studio ConsenSys. Lubin, though a committed ecosystem leader, has also probably liquidated ETH for fiat over the years.

“I’ve done nothing but disseminate the tokens,” Lubin said, adding, “I haven’t acquired any tokens since genesis.” (Ethereum went live in 2015 and was preceded by a “pre-mine” that pre-allocated 60% of its initial supply.)

Lubin cannot prove these claims unless he reveals all his alphanumeric blockchain addresses, which is akin to someone sharing their banking details. Though “openness” and “verifiability” are guiding principles of the digital asset industry, at a personal level, perhaps this is none of our business.

Lubin certainly influences Ethereum and is often thought of as a generous – if profligate – leader, benefactor and investor. Though former employees are suing him, is criticized for cozying up to JPMorgan (JPM) and nearly drove ConsenSys into the ground (after pursuing an investment strategy that was less “incubation” and more “throw a hundred eggs into the air”), his vision and capital is central to Ethereum.

Lubin has described ConsenSys – which initially raised no debt, took no investments and has nearly gone bankrupt – lovingly as a “global organism.” But it’s an organism that in its early days burned through a reported $100 million in cash per year. A significant percentage of its for-profit operations have failed, though it's also responsible for essential software like MetaMask that’s free to use.

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New research from Kim at Galaxy shows that although highly centralized at the beginning, Ethereum’s supply has become more distributed. Analytics show that many of the accounts that received the most pre-mined ETH have sent a significant amount to centralized exchanges.

“Conversely, only 1.6 million ETH (~2.3% of the pre-mine supply) has been held unmoved,” she writes. Mining, the computational process that Ethereum is ditching, has also diluted the earliest user’s total supply, a process that will dramatically slow after the Merge’s switch to proof-of-stake.

“From what I know, I have zero concern that there’s any sort of concentration amongst the original owners,” Lubin said.

A less equal distribution of capital within Ethereum has long been a bugbear of critics who see it as a measure of fairness. But once secured by proof-of-stake, these figures will directly impact Ethereum’s censorship resistance or credible neutrality.

Theoretically proof-of-stake security allows anyone to contribute toward and get paid for network validation, (unlike under proof-of-work which requires a significant amount of capital upfront to buy specialized computers called miners).

But third parties have already emerged and capitalized on staking, partly because becoming a validator costs 32 ETH. Crypto exchanges Coinbase (COIN), Kraken and Binance account for just over 20% of total staked ETH, Kim wrote. While Lido, a so-called liquid staking protocol, was an early mover in the space allowing for incremental ETH deposits, it is now “the single largest controlling entity of staked ETH.”

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Lido’s staked ETH token is now trading at a 5% discount to ETH, partly because it functions like a bond exchangeable for an asset at par at a later date. But amid a market down cycle, there are also potential liquidity concerns and implications for protocols like Celsius that have collateralized their holdings using Lido and may not be able to fully redeem their customers’ funds.

Concentration among stakers is a much deeper issue than the question of Lubin’s holdings. In proof-of-stake systems, capital will generate more capital if it’s put up for stake, meaning that the network will primarily reward those that already have the most.

“ConsenSys is a new kind of business, it takes in thousands of different tokens in our work,” Lubin said. “We’re doing our best to accumulate ether tokens in advance of this thing called the Merge … which we’ll just assume is going to go well.”