Ethereum Foundation under the knife: Buterin confirms 40% budget cut and loss of key personnel
The Ethereum Foundation (EF) is entering a phase of strict austerity. Network co-founder Vitalik Buterin confirmed that the foundation's budget will be cut by approximately 40% this year. This is not just "expense optimization"—it is a fundamental reassessment of the governance model and long-term strategy, which has already led to an outflow of talented developers.
According to Buterin, the decision to cut was embedded in last year's treasury management policy. Previously, the EF spent about 15% of its remaining funds annually. Now, an ambitious goal has been set to reach an expenditure level of 5% per year, which will only be achieved after 2030. This means the foundation intends to become much more resilient to external pressure without relying on large budgets.
Not Just "Efficiency Improvement"
Buterin refused to call the ongoing changes a simple "efficiency improvement." He emphasized that he respects his departing colleagues too much to downplay their loss. The departing employees are "brilliant people and dedicated engineers," some of whom have worked on the Ethereum protocol for nearly a decade. This is a serious blow to the foundation's institutional memory and expertise.
Despite the cuts, the EF does not intend to reduce its ambitions in protocol development. The key focus remains the Ethereum Strawmap—a massive roadmap designed to replace and supplement every part of the protocol: consensus, proofs, privacy, account models, and network state management. Buterin calls this the third iteration of Ethereum after The Merge.
One of the main changes will be a shift in the "multi-client" model. Previously, the security strategy relied on redundancy: if an error occurred in one client, the network continued to operate. Now, the foundation is increasingly exploring another approach—formal verification using artificial intelligence.
Changes will also affect other areas. 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 over time. The number of large-scale projects outside of Ethereum from the foundation will decrease. As Buterin previously announced, he will take on some of these initiatives using his personal funds.
Long-Term Vision: "Soft Completion"
In the long term, Buterin advocates for an approach he calls "soft completion." In his assessment, once the Strawmap roadmap is implemented, the foundation should mostly limit itself to security fixes and small, valuable changes.
The bar for adding new features to the protocol should become significantly higher. This approach will allow Ethereum to remain resistant to capture without requiring large budgets. As a benchmark, Buterin suggested looking to Bitcoin rather than "cumbersome projects with millions of lines of code." This signals a shift toward a more restrained model of network development.
Buterin acknowledged that recent years have been a difficult period for Ethereum. However, in his assessment, the ecosystem is adapting both within and outside the foundation. The network is well-prepared to develop successfully.
My analysis: The 40% budget cut at the EF is not just financial discipline but a strategic pivot. The foundation is moving away from the role of the ecosystem's "central bank" toward that of a "protocol custodian." This reduces centralization risks but increases the burden on independent developer teams. The departure of veterans is a worrying signal that could slow the pace of innovation. The market will likely react to this news with short-term volatility, but in the long run, the EF's financial stability is a positive factor for the entire Ethereum network.