The Ethereum Foundation enters an era of austerity: budget cut by 40%, staff leaving the project
Ethereum co-founder Vitalik Buterin has officially confirmed what has been whispered in the corridors for months: the Ethereum Foundation (EF) is entering a phase of radical budget consolidation. The foundation's expenses will be reduced by approximately 40% this year, which Buterin says is the result of a conscious treasury management policy established last year. We are witnessing a transition from an active funding model to a long-term endowment strategy.
A New Financial Paradigm
According to Buterin's statements, until 2026 the EF was spending about 15% of its remaining reserves annually. Now the target is shifting towards 5% per year, which will only be achieved after 2030. This means the foundation intends to minimize dependence on external pressure, ensuring its sustainability without the need for large budgets. Essentially, the EF is moving from an "active investment" mode in the ecosystem to a "capital management" mode, a sign of maturity and pragmatism.
The Cost of Restructuring: Loss of Talent
Buterin did not sugarcoat the situation. He stated outright that the cuts are not simple optimization. The foundation is losing "brilliant people and dedicated engineers," many of whom have devoted nearly a decade to developing the Ethereum protocol. Unlike typical corporate rhetoric, Buterin emphasized that he respects the departing colleagues too much to pretend nothing has happened. This is an honest admission that speaks to the depth of the personnel losses.
Focus on Strawmap: The Third Iteration of Ethereum
Despite the cuts, ambitions for protocol development are not diminishing. The key focus remains the Strawmap roadmap — a massive initiative aimed at replacing and supplementing every element of the protocol, from consensus and proofs to privacy, account models, and state management. Buterin calls this the "third iteration of Ethereum" after The Merge.
One of the main changes will be abandoning the "redundancy" strategy in favor of formal verification using artificial intelligence. Previously, the network relied on multiple clients to guard against errors; now the emphasis shifts to more mathematically rigorous code verification methods.
Project Closures and Personal Investments
The restructuring will also affect other divisions. The separate Privacy and Scaling Explorations (PSE) group is being wound down as an independent unit. The Devcon conference will become more modest and less costly. The number of large-scale projects outside of Ethereum funded by the foundation will be reduced. As Buterin previously announced, he is taking on some of these initiatives himself, funding them from his personal funds.
Looking to the Future: "Gentle Endgame"
In the long term, Buterin advocates for the concept of a "gentle endgame." After the Strawmap roadmap is implemented, the foundation should mainly focus on security fixes and small but valuable improvements. The bar for adding new features to the protocol should be significantly raised. As a benchmark, Buterin suggests looking to Bitcoin rather than "bloated projects with millions of lines of code."
Cryptalist Analysis: The EF's decision is not just a budget cut, but a fundamental shift in management philosophy. The transition to an endowment model and the focus on a "gentle endgame" signal that Ethereum is entering a phase of stabilization and conservation. This could be a positive signal for long-term investors expecting reduced uncertainty, but in the short term, the loss of key developers is a serious risk to the network's innovative potential.