The Ethereum Foundation under the knife: Buterin confirms a 40% budget cut and loss of key personnel
The Ethereum Foundation (EF) is entering a phase of austerity. Network co-founder Vitalik Buterin has officially confirmed that the foundation's budget will be cut by approximately 40% this year. According to him, this decision was embedded in the treasury management strategy last year and entails a number of difficult but necessary decisions.
The essence of the changes is a transition from a "spend while you have it" model to a long-term endowment. Previously, the EF spent about 15% of its remaining funds annually. The new goal is to reach a sustainable level of 5% per year, which is planned to be achieved by 2030. The foundation aims to become as resilient as possible to external pressure, without relying on large budgets.
The Cost of Optimization: Losing "Brilliant Minds"
Buterin did not sugarcoat the situation, calling what is happening "simply an efficiency improvement." He directly acknowledged that the foundation is losing people — "brilliant and dedicated engineers," some of whom have worked on the Ethereum protocol for nearly a decade. This is not just a staff reduction, but a loss of deep expertise accumulated over years.
Despite the budget cuts, ambitions for protocol development are not diminishing. The key focus becomes the Ethereum Strawmap — a massive roadmap that, according to Buterin, aims to update every element of the network: from consensus and proofs to privacy and account models. This is, in essence, the third iteration of Ethereum after The Merge.
New Strategy: From Redundancy to AI Verification
One of the main changes will be a shift in the "multi-client" model. Previously, network security was built on redundancy: a bug in one client would not bring down the entire network. Now, the EF is actively exploring an alternative approach — formal code verification using artificial intelligence. This could radically improve reliability but requires a completely different set of skills and resources.
The Privacy and Scaling Explorations (PSE) division is being wound down as a separate unit. The Devcon conference will become more modest and less costly. The number of major projects outside of Ethereum funded by the foundation will decrease. As Buterin previously announced, he is taking over the personal funding of some initiatives.
"Soft Completion" and the Bitcoin Example
In the long term, Buterin sees the EF's future in the concept of "soft completion." After the Strawmap roadmap is implemented, the foundation should primarily focus on security fixes and minor, valuable changes. The bar for adding new features to the protocol should become significantly higher.
As a benchmark, he suggests looking to Bitcoin, rather than "cumbersome projects with millions of lines of code." This signals a shift towards a much more restrained and conservative model of network development.
Cryptalist Commentary: The 40% budget cut at the EF is not just an anti-crisis measure, but a fundamental shift in the management philosophy of one of the most influential projects in the crypto industry. The transition to an endowment model and "Bitcoin-like" conservatism is a bet on long-term sustainability and decentralization, even at the cost of losing current momentum and talented personnel. The market has yet to fully assess how radically this changes Ethereum's development trajectory.