Inside Vitalik’s 256 ETH grant: As Ethereum falls, privacy rises

Vitalik Buterin recently transferred a grant of 256 ETH to two messaging projects, Session and SimpleX Chat, without the usual ecosystem fanfare.

Both applications occupy a part of the Internet that rarely has real support: metadata-tolerant communication, so the gesture was modest in size but well-intentioned.

Their design addresses the parts of digital messaging that encryption alone cannot protect: the structural details that reveal who is talking, how often, and on which networks.

Mr. Buterin’s gift brings attention to the field with unusual clarity, focusing on two projects built to reduce the information that modern platforms routinely broadcast by default.

Session and SimpleX are Ethereum agnostic, do not use accounts tied to the blockchain, and do not integrate with on-chain systems. These are separate parts of Privacy Engineering. Based on public documents, Buterin only funded the development of two messaging systems built around stronger defaults.

This narrow scope is what makes the donation interesting, as these two projects approach privacy from angles that most mainstream apps avoid: routing design and identity design.

Two apps that actually received funding

Sessions: A metadata-enhanced routing system built around onion paths and pseudonymous keys.

The session’s white paper outlines messaging networks structured around public key identities and relay systems designed to blur the relationship between sender and receiver. Every user is represented by a keypair rather than a phone number or email address, and every message goes through a multihop onion routing path that splits awareness across multiple nodes, so no single repeater can monitor both ends of the conversation.

To further reduce exposure, messages are stored in a distributed cluster of nodes called a “swarm.” The swarm holds encrypted messages temporarily so users don’t have to be online at the same time. Swarms store ciphertext without knowing what it contains, and the routing layer intentionally fragments the information available to each relay.

The network also incorporates staking requirements for node operators. This is a Sybil resistance countermeasure that increases the cost of creating large fleets of malicious relays. The protocols described in the whitepaper emphasize metadata as a primary privacy risk and frame routing and storage choices around limiting what intermediaries can learn. The result is a system where communications leave a much smaller observable footprint than traditional centralized messaging, even when content encryption is taken for granted.

SimpleX: a messaging model that completely avoids user identifiers

SimpleX takes a different approach described in its protocol specification. Rather than trying to hide metadata behind complex routing, minimize metadata by eliminating persistent user identifiers altogether. The network does not assign usernames, numbers, or any form of stable identification. Users connect via a one-time invitation or QR code, and each relationship is treated as its own encrypted channel with a unique key isolated from other relationships.

Messages are relayed through the SimpleX server, which acts as a transport mechanism rather than an identity hub. The server recognizes the packet, but has no information linking the packet to the user or conversation graph. All state (contacts, channels, message history) is stored locally on the user’s device. Relationship discovery occurs between endpoints, not on the server.

This protocol has no global concept of identity, so the usual metadata surfaces evaporate. The server has nothing to correlate, nothing to collect, and nothing to reveal the structure of your social network. While Session builds a hardened routing pipeline, SimpleX creates a communication model with very little for the network to monitor from the beginning.

Together, these designs represent two interpretations of privacy engineering based on the details of each protocol rather than marketing slogans.

Why is this grant important, even if limited in scope?

Although the size of the donation is much smaller than most funding rounds in cryptocurrencies, the signal it sends is clearer than many large-scale efforts. Communication tools occupy a strange place in digital infrastructure. Although we all rely on communication tools, most applications treat privacy as a layer that can be added on later, rather than a property that needs to be built from the ground up. Session’s routing design and SimpleX’s identifierless model both start at opposite ends of the spectrum.

While the Ethereum ecosystem has been grappling with issues around privacy, scalability, and user experience for years, blockchain is inherently bad at protecting communication patterns. The default behavior of global broadcasts does not translate well to private conversations, nor is it intended to do so. Messaging systems built with privacy in mind must be designed with a variety of threats in mind, and this is certainly the case with these two projects.

By directing funds to these two projects, Buterin acknowledges that private communication is a prerequisite for a healthier internet, even if that communication takes place entirely outside of Ethereum. There is nothing in the whitepaper or repository to suggest any integration with wallets, smart contracts, or decentralized applications, and the protocol is standalone. But users who interact with on-chain systems still spend most of their digital lives off-chain, so privacy tools don’t have to be important to blockchain ecosystems.

Donations are made during a quiet phase of the market and there is no hype, making it easier to understand which parts of your digital infrastructure deserve attention. Even relatively small grants make sense because these apps are open source, rely on distributed volunteer or community-run infrastructure, and benefit directly from small increases in funding.

Privacy as a starting point for architecture

Vitalik Buterin’s 256 ETH donation does not outline the future of Ethereum, nor is it a roadmap for on-chain privacy. It focuses on two systems that emphasize privacy at the protocol level, each addressing a different aspect of the metadata problems that dominate modern communications. Session focuses on reducing what routing nodes can guess, whereas SimpleX avoids constructing identifiers that can be guessed in the first place.

These approaches are based on their own whitepapers and are presented as concrete examples of what privacy engineering can look like when it starts at the base layer rather than as an optional feature. If the future of the Internet requires stronger guarantees about who sees what and when, this type of system will need support, even without blockchain.