The Ethereum Foundation enters an era of austerity: a 40% budget cut and a shift in priorities
The Ethereum Foundation (EF) is entering a strict austerity mode. Vitalik Buterin confirmed that the foundation's budget will be cut by approximately 40% this year. According to him, this decision was embedded in the financial policy last year and is part of a long-term strategy to create a sustainable endowment.
Until 2026, the EF spent about 15% of its remaining funds annually. Now, the foundation is moving toward a target rate of 5% per year, which will be achieved after 2030. The main goal is to ensure financial independence and resilience to external pressure without relying on large budgets.
Painful Losses and Resource Reallocation
Buterin does not attempt to present this as mere "optimization." He openly acknowledges that the EF is losing talented employees, calling them "brilliant people and dedicated engineers," many of whom have worked on the Ethereum protocol for nearly a decade. This is not just cost-cutting—it is the loss of key personnel, which is always painful for any organization.
Despite the budget cuts, the EF's ambitions for protocol development remain undiminished. The main focus is the Ethereum Strawmap, a large-scale roadmap that Buterin says will become the third iteration of Ethereum after The Merge. It covers consensus, proofs, privacy, account models, and network state.
A key change will be a shift from the "multiple clients" strategy to formal verification using artificial intelligence. Previously, security was ensured through redundancy: a bug in one client would not paralyze the entire network. Now, the emphasis is shifting to mathematical code verification.
Structural changes will affect other areas as well. The Privacy and Scaling Explorations (PSE) unit is being wound down as a separate entity. The Devcon conference will become more modest and less costly. The number of large-scale projects outside of Ethereum funded by the foundation will decrease. Buterin promises to support some of these initiatives with his personal funds.
The Vision of a "Soft Sunset" and Lessons from Bitcoin
In the long term, Buterin advocates for an approach he calls a "soft sunset." After the Strawmap is implemented, the foundation should largely limit itself to security fixes and small, valuable changes. The bar for adding new features to the protocol should be set significantly higher.
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 security are prioritized over functional expansion.
My analysis: This decision is an inevitable stage in Ethereum's maturation. The transition from an "unlimited budget startup" model to a managed endowment is a sign of maturity, but it carries the risk of losing developmental momentum. The departure of key engineers could slow down the implementation of the ambitious roadmap. However, if the EF manages to maintain its focus on the Strawmap and formal verification, we may witness the birth of a more sustainable and secure Ethereum that is less dependent on the will of a single foundation.