The Ethereum Foundation is cutting its budget by 40%: Buterin on "tough decisions" and a new strategy
The Ethereum Foundation (EF) is entering a phase of austerity. Co-founder Vitalik Buterin confirmed that the foundation is cutting expenses by approximately 40% this year. According to him, this decision was embedded in last year's treasury management policy and entails a series of difficult personnel and strategic decisions.
Buterin stated outright that he does not intend to call the process "optimization" or "efficiency improvement." He respects departing colleagues too much to downplay their loss. Many of them were dedicated engineers who had worked on the Ethereum protocol for nearly ten years. The foundation is losing "brilliant people," and Buterin admits this is a serious blow.
New Spending Model: From 15% to 5% Per Year
Until 2026, the EF spent on average about 15% of its remaining funds annually. Now, the foundation is moving toward a target of approximately 5% per year, to be achieved after 2030. This is a fundamentally different model — a transition from a "spending" model to an "endowment" model (a long-term support fund). The organization aims to remain resilient to external pressure without requiring large budgets in the future.
What Changes: Eliminating Redundancy and Focusing on Strawmap
Despite the cuts, ambitions for protocol development are not diminishing. The key direction becomes the Ethereum Strawmap — a massive roadmap intended to replace and supplement every part of the protocol: consensus, proofs, privacy, account models, and state management. Essentially, this is the third iteration of Ethereum after The Merge.
One of the main changes will be abandoning the "multiple clients" strategy as the primary method of security. Previously, client redundancy saved the network from errors in any single client. Now, the EF is increasingly exploring formal verification using artificial intelligence.
The Privacy and Scaling Explorations (PSE) division is being wound down as a separate unit. The Devcon conference will become more modest and less costly. The number of large-scale projects outside of Ethereum from the foundation will decrease. Buterin, as he previously announced, will take on some of these initiatives using personal funds.
"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 mostly limit itself to security fixes and small, valuable changes. The bar for adding new features to the protocol should be significantly raised.
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, where stability and simplicity are valued above the constant addition of functionality.
Cryptalist Analysis: This is not just a budget cut, but a fundamental shift in management paradigm. The Ethereum Foundation is abandoning the role of a "venture fund" and "project incubator," focusing on the narrow but critically important task of maintaining the protocol core. The loss of experienced engineers is a worrying signal, but the transition to a long-term endowment model could make the EF more independent of market cycles. The question is whether the ecosystem can fill this personnel and financial vacuum with external teams.