The Ethereum Foundation cuts its budget by 40%: Buterin confirms inevitable reorganization
Ethereum co-founder Vitalik Buterin has officially confirmed that the Ethereum Foundation (EF) is cutting its budget by approximately 40% this year. According to him, this decision was embedded in treasury management policy last year and is part of a strategy to transition to a long-term endowment model. The foundation is moving away from the usual practice of spending a significant portion of its reserves annually — previously, the EF spent about 15% of its remaining funds per year. Now, the target is being reduced to 5% per year, which will be achieved after 2030.
What the foundation is losing: personnel losses and resource reallocation
Buterin does not try to soften the blow by calling the cuts an "efficiency improvement." He directly states that he respects his departing colleagues too much to pretend nothing has happened. The departing employees, he says, are "brilliant people and dedicated engineers," some of whom have worked on the Ethereum protocol for nearly a decade. The foundation is losing valuable personnel, and this is an inevitable stage of restructuring.
At the same time, ambitions for protocol development are not diminishing. The key focus remains the Ethereum Strawmap — a comprehensive roadmap covering consensus, proofs, privacy, account models, and network state management. Buterin calls this the third iteration of Ethereum after The Merge. The security strategy is also changing: from redundancy (where a single client failure does not paralyze the network), the foundation is moving to formal verification using artificial intelligence.
Changes are also affecting 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, and the number of large-scale projects outside of Ethereum from the foundation will decrease. Buterin is taking on some of these initiatives with his personal funds.
Long-term vision: "soft completion" and the Bitcoin example
In the long term, Buterin advocates for an approach he calls "soft completion." After the Strawmap roadmap is implemented, the foundation should focus mainly on 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 suggests 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. He acknowledges that recent years have been a difficult period for Ethereum but believes the ecosystem is adapting both within and outside the foundation. The network, in his assessment, is well-prepared to continue developing successfully.
Cryptalist Analysis: The EF's 40% budget cut is not just financial optimization but a fundamental shift in Ethereum's management strategy. The foundation is clearly preparing for long-term survival in uncertain conditions, moving away from aggressive hiring and large-scale projects. The transition to a "soft completion" model and the focus on Bitcoin as an example signal that Ethereum is becoming a more conservative and pragmatic project. However, the loss of talented engineers is a serious risk that could slow innovation in critically important areas of the protocol. The market must assess whether such a sacrifice is justified for long-term sustainability.