Academics Warn 55% NSF Cut Threatens US Crypto Innovation

An open letter penned by a group of esteemed academics, including Dan Boneh from Stanford, Joseph Bonneau from NYU, Giulia Fanti from Carnegie Mellon, Ben Fisch from Yale, Ari Juels from Cornell, Farinaz Koushanfar from U.C. San Diego, Andrew Miller from University of Illinois at Urbana Champaign, Ciamac Moallemi from Columbia, David Tse from Stanford, and Pramod Viswanath from Princeton, highlights the critical role of academic innovation in the crypto and blockchain industry. The letter underscores that many groundbreaking technologies and protocols, such as Byzantine Fault Tolerant (BFT) protocols, digital signatures, formal verification, maximal extractable value (MEV), public-key cryptography, proof of work, rollups, trusted execution environments (TEEs) used in blockchain systems, verifiable random functions (VRFs), and zero-knowledge proof systems, were developed by researchers with deep roots in academic institutions.

The authors emphasize that these innovations have not only fueled but also transformed the crypto industry. They argue that while regulatory and legislative reforms are essential for supporting innovation and protecting consumers, the U.S. government's proposed cuts to academic research funding could severely impact the future of crypto innovation. The White House's budget proposal for 2025 includes a 55% cut for the National Science Foundation (NSF), which is a primary source of funding for computer science research at U.S. universities. This funding has been instrumental in driving crypto innovations. In contrast, China increased its research budget by 10% last year, indicating a growing investment in academic research.

The letter warns that defunding the NSF would mean defunding scientists in the U.S., including those leading crypto innovation. This could lead to a thinning of the pipeline of PhD students studying blockchain, which is a long-term indicator of the industry's health. Several of the companies and projects mentioned in the letter were co-founded by former members of the authors' academic groups or by the authors themselves. If future members of these groups vanish alongside scientific funding, so will the successful founders of future crypto companies in the U.S. PhD students are also the engine that powers academic and industry research, doing the brain- and labor-intensive work behind technical innovations that lead to faster, more secure blockchains.

The authors conclude that while better regulation and legislation could benefit the crypto industry, U.S. leadership in crypto won't be secured by policy alone. They emphasize that science is at the forefront of crypto innovation and that U.S. universities have long been its powerhouse. The letter urges readers to contact their congressional representatives and senators to support research funding that has made American universities the seedbed of global scientific and technical leadership, including blockchain technology. The authors believe that if the U.S. stops investing in academic research, no amount of regulatory machinery will save the industry's future innovations.