The Ethereum Foundation cuts budget by 40%: Buterin confirms tough measures and loss of key personnel
Ethereum co-founder Vitalik Buterin has officially confirmed that the Ethereum Foundation (EF) is entering a phase of austerity. This year, the organization's budget will be cut by approximately 40%, which, according to him, has already led to a number of "difficult decisions" and the loss of valuable employees.
Buterin emphasizes that this is not just an "efficiency optimization." He directly refers to departing colleagues as "brilliant people and dedicated engineers," some of whom have worked on the protocol for nearly a decade. The goal is a transition to a long-term endowment model. Whereas previously the EF spent about 15% of its remaining funds annually, the target is now being reduced to 5% per year, planned to be achieved after 2030. This means a drastic reduction in operating expenses starting now.
What the foundation is losing and where resources will go
The cuts will not only affect salaries. The Privacy and Scaling Explorations (PSE) division is being wound down as a separate unit. The large-scale Devcon conference will become more modest and less costly. The number of major external projects funded by the foundation will also decrease. Buterin stated that he will support some initiatives from his personal funds.
However, despite the budget cuts, ambitions for protocol development are not diminishing. The key focus remains the "Ethereum Strawmap" — a large-scale roadmap that essentially represents the third iteration of Ethereum after The Merge. It covers consensus, proofs, privacy, the account model, and state management.
One of the main changes will be a shift in security strategy. Previously, the emphasis was on redundancy through "multiple clients." Now, the EF is actively researching formal verification using artificial intelligence. This is a more efficient, but also more complex, approach.
Long-term vision: "soft completion"
Buterin suggests looking to the Bitcoin model as a guide, rather than "cumbersome projects with millions of lines of code." After the Strawmap is implemented, he believes the foundation should mostly limit itself to security fixes and small, valuable changes. The bar for adding new features should become "significantly higher." This will allow Ethereum to remain resistant to capture without requiring huge budgets.
Expert opinion. The 40% budget cut at the EF is a signal of maturity, but also a serious challenge. Ethereum is transitioning from an era of expansive funding to a "lean production" mode. The loss of experienced engineers is a warning sign, but the focus on formal verification and long-term sustainability could make the network stronger. The market should watch closely to see if this slows down the implementation of key upgrades, such as The Surge and The Verge.