The Ethereum Foundation enters an era of austerity: budget cut by 40%, key developers leave the project
The Ethereum Foundation (EF) is transitioning into a long-term endowment model, which implies a radical reduction in operating expenses. According to my sources, the foundation's budget will be cut by approximately 40% this year. This is not just an "optimization" — it is a painful transformation that has already led to the loss of several key specialists.
Vitalik Buterin, co-founder of Ethereum, confirmed this information. According to him, previously the EF spent about 15% of its remaining funds annually, but now the target is being reduced to 5% per year, which will be achieved after 2030. This model is designed to ensure the organization's resilience to external pressure without requiring huge budgets. Buterin emphasized that he does not call what is happening an "efficiency improvement" because he respects the departing colleagues too much. He described them as "brilliant people and dedicated engineers," some of whom have worked on the Ethereum protocol for nearly ten years.
What the foundation is losing and where resources will go
Despite the cuts, the EF is not reducing its ambitions in protocol development. The key focus remains the Ethereum Strawmap — a massive roadmap aimed at replacing and supplementing every part of the protocol: consensus, proofs, privacy, account model, and 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 was built on redundancy: if an error occurred in one client, the network continued to operate. Now, the foundation is actively exploring another approach — formal verification using artificial intelligence.
The changes will also affect other areas. The Privacy and Scaling Explorations (PSE) unit is being disbanded as a separate entity, the Devcon conference will become more modest and less costly over time, and 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 for the protocol
In the long term, Buterin advocates for an approach he called "soft completion." In his assessment, after the Strawmap roadmap is implemented, the foundation should mainly 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 marked the transition to a more restrained model of network development.
Vitalik 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 EF's decision to transition to an endowment model and cut the budget is not a sign of weakness, but a mature step aimed at long-term sustainability. However, the loss of "brilliant people" is a serious signal. The market should closely monitor how these changes will affect the pace of development and Ethereum's competitiveness against more aggressive L1 projects. In the next 12-18 months, we will see how effectively the EF can balance austerity with maintaining its innovative potential.