The Ethereum Foundation cuts its budget by 40%: Buterin confirms "difficult decisions" and the loss of key personnel
Ethereum co-founder Vitalik Buterin has officially confirmed a major restructuring of the Ethereum Foundation (EF). This year, the foundation is cutting its operational budget by approximately 40%, which inevitably entails the loss of valuable employees and a shift in priorities. This is not just "optimization"—it is a deliberate transition to a long-term endowment model, laid out in last year's treasury management policy.
Numbers and Strategy: From 15% to 5% Per Year
Until 2026, the EF spent on average about 15% of its remaining funds annually. The new goal is to reach a rate of about 5% per year, which calculations suggest will be achieved after 2030. Buterin emphasizes that the foundation aims to remain resilient to external pressure without requiring huge budgets. This means the organization is consciously moving away from the familiar model of "redundancy" in favor of more restrained and sustainable development.
Loss of "Brilliant Minds" and a New Development Vector
Buterin did not simply call this a matter of increased efficiency. He openly acknowledged that the foundation is losing "brilliant people and dedicated engineers," some of whom have worked on the Ethereum protocol for nearly a decade. Despite the cuts, ambitions for protocol development are not diminishing. The key direction is the Ethereum Strawmap roadmap—a large-scale plan designed to replace and enhance every aspect 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 security strategy was built on redundancy: if an error occurred in one client, the network continued to operate. Now, the EF is actively exploring another approach—formal verification using artificial intelligence. This is a radical step that could change the very architecture of network security.
What the Foundation is Losing and Where Resources Will Go
The restructuring will affect several key 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. The number of large-scale projects outside of Ethereum from the foundation will decrease. As Buterin previously announced, he is taking on some of these initiatives using his personal funds.
Long-Term Vision: "Soft Completion"
In the long term, Buterin advocates for an approach he calls "soft completion." In his assessment, once 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 be set significantly higher. As a benchmark, he suggested looking to Bitcoin as an example, rather than "bloated projects with millions of lines of code."
Expert Opinion: The 40% budget cut at the EF is not a sign of weakness, but a harsh necessity to ensure the long-term viability of the network. The shift to an endowment model and the bet on formal verification with AI is a bold step that could make Ethereum more resilient, but it also signals that the era of "easy money" for the ecosystem is coming to an end. The loss of experienced personnel is always a risk, but perhaps it is the price to pay for transitioning to a more mature and decentralized governance model.