The Ethereum Foundation enters an era of austerity: a 40% budget cut and a shift in priorities
Ethereum co-founder Vitalik Buterin has confirmed that the Ethereum Foundation (EF) is entering a phase of radical optimization. The organization is cutting its annual budget by approximately 40%, a decision that, according to him, has already led to the departure of several key employees, whom he described as "brilliant people and dedicated engineers."
This is not just about "increasing efficiency"—Buterin explicitly states that he respects his colleagues too much to pretend nothing is happening. The reduction was embedded in the treasury management policy last year. The Foundation is transitioning from a model where it spent about 15% of remaining funds annually to a target of 5% per year. This level is expected to be reached after 2030.
Where Resources Are Going and What Is Changing
The budget cut does not mean a freeze on development. On the contrary, the EF is concentrating its efforts on the main priority—the Ethereum Strawmap roadmap. Buterin calls it "the third iteration of Ethereum after The Merge." This plan covers all key protocol components: consensus, proofs, privacy, account models, and network state management.
A key strategic shift is the move away from the "multiple clients" paradigm as the sole security strategy. Previously, redundancy ensured that a bug in one client would not paralyze the network. Now, the Foundation is actively exploring formal verification using artificial intelligence—a more precise and likely less resource-intensive approach.
Internal changes are also significant. The Privacy and Scaling Explorations (PSE) unit is being disbanded as a separate entity. The Devcon conference will become more modest and less costly. The number of major projects outside of Ethereum supported by the Foundation will decrease. As Buterin previously announced, he will fund some of these initiatives from his personal funds.
Long-Term Vision: "Soft Completion" and the Bitcoin Example
In the long term, Buterin advocates for a so-called "soft completion." After the Strawmap is implemented, the Foundation should largely limit itself to security fixes and small but valuable changes. The bar for adding new features to the protocol should be significantly raised.
As a benchmark, he suggests looking to Bitcoin rather than "bloated projects with millions of lines of code." This signals a shift toward a more restrained model of network development, where stability and resistance to capture are valued more than constant feature expansion.
My analysis: The EF's 40% budget cut is not a sign of weakness but a painful yet necessary step toward maturity. The Foundation is ceasing to be a "venture arm" for the entire ecosystem and transforming into a classic protocol foundation focused on the core. The departure of talented engineers is a loss, but the bet on formal verification and AI tools could, in the long run, make protocol development not only cheaper but also more reliable. Ethereum is growing up, and that always comes with tough decisions.