The Ethereum Foundation is cutting its budget by 40%: Buterin on talent loss and new strategy
Ethereum co-founder Vitalik Buterin confirmed that the Ethereum Foundation (EF) is cutting its budget by approximately 40% this year. According to him, this decision was embedded in the treasury management policy last year: the foundation is transitioning to a long-term endowment model.
Buterin explained that until 2026, the EF spent on average about 15% of its remaining funds annually. Now, the target is being reduced to approximately 5% per year, which will be achieved after 2030. The organization aims to maintain resilience to external pressure without requiring large budgets.
Personnel losses and resource reallocation
Buterin did not describe the situation as a simple efficiency improvement. He emphasized that he respects his colleagues too much to pretend nothing has been lost. He characterized the departing employees as "brilliant people and dedicated engineers," some of whom had worked on the Ethereum protocol for nearly a decade.
Despite the cuts, the foundation does not intend to reduce its ambitions in protocol development. The key focus is the Ethereum Strawmap — a massive roadmap designed to replace and supplement every part of the protocol: consensus, proofs, privacy, account model, and state management. Essentially, this is the third iteration of Ethereum after The Merge.
One of the main changes will be a shift in the "multi-client" model. Previously, the primary security strategy was redundancy: if an error occurred in one client, the network continued to operate. Now, the foundation is more actively exploring another approach — formal verification using artificial intelligence.
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 personally fund some of these initiatives with his own resources.
Long-term protocol vision
In the long term, Buterin advocates for an approach he calls "soft finality." In his assessment, after the Strawmap roadmap is implemented, the foundation should primarily limit itself to security fixes and minor valuable changes.
The bar for adding new features to the protocol should be significantly raised. This approach will allow Ethereum to remain resistant to capture without requiring large budgets. As a benchmark, Buterin suggested looking to Bitcoin as an example, rather than "cumbersome projects with millions of lines of code," thereby signaling a shift toward a more restrained network development model.
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, in his opinion, is well-prepared to develop successfully.
Analyst comment: The 40% budget cut by the EF is not just financial optimization but a strategic shift toward decentralized governance and resilience. The departure of experienced engineers is a painful but necessary price for transitioning to a model where Ethereum's development depends less on a single centralized foundation. In the long term, this could strengthen the network, but in the short term, it may slow the pace of innovation adoption.