Ethereum Foundation Under the Knife: Buterin Confirms 40% Budget Cut and Exodus of Key Developers
The Ethereum Foundation (EF) is entering a phase of strict financial discipline. Co-founder of the network, Vitalik Buterin, confirmed that the foundation's budget will be cut by approximately 40% this year. This is not just "cost optimization," but the result of a deliberate treasury management policy established last year. The foundation is shifting from a model of active spending to a long-term endowment strategy.
Facts and Figures: From 15% to 5%
Until 2026, the EF spent on average about 15% of its remaining funds annually. Now, the target is being reduced to ~5% per year, a level that will only be reached after 2030. Buterin emphasizes that the organization must remain resilient to external pressure without relying on large budgets. This means the foundation intends to live off the interest from its capital, rather than depleting it.
Losses: "Brilliant People" Are Leaving
Buterin did not sugarcoat reality. He stated outright that he "respects his colleagues too much to pretend nothing has been lost." He described the departing employees as "brilliant people and dedicated engineers," some of whom had worked on the Ethereum protocol for nearly a decade. This is a significant blow to the foundation's expertise.
Where Will Resources Go?
Despite the cuts, the EF does not intend to reduce its ambitions in protocol development. The key focus becomes the Ethereum Strawmap — a massive roadmap that Buterin describes as "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 abandoning the "multi-client redundancy" strategy in favor of formal verification using AI. Previously, security was ensured through client duplication — if one failed, the network continued operating. Now, the emphasis is on mathematical proof of code correctness.
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, and the number of major projects outside of Ethereum from the foundation will decrease. As Buterin previously announced, he will personally fund some of these initiatives using his own resources.
Long-Term Vision: "Soft Completion"
Buterin advocates for an approach he calls "soft completion." After the Strawmap roadmap is implemented, the foundation should largely limit itself to security fixes and minor, valuable changes. The bar for adding new features to the protocol should be significantly raised. He suggests taking inspiration from Bitcoin, rather than "bloated projects with millions of lines of code."
My Analysis: This is not just a budget cut — it is a shift in philosophy. The Ethereum Foundation is abandoning the role of a "giant venture fund" and transitioning to a model of a "protocol steward." The departure of veterans is painful but perhaps a necessary stage. The market should perceive this as a signal of maturity: the EF is learning to live within its means and focus on what matters most — the security and sustainability of the base layer. If the Strawmap is implemented, we will see a more conservative, yet more reliable Ethereum.