The Ethereum Foundation cuts its budget by 40%: Buterin on restructuring and a new roadmap
Ethereum co-founder Vitalik Buterin confirmed that the Ethereum Foundation (EF) is cutting its operational budget by approximately 40% this year. This decision, embedded in treasury management policy last year, entails a series of difficult but necessary steps. The Foundation is transitioning to a long-term endowment model, moving away from the customary practice of large annual expenditures.
Buterin explained that until 2026, the EF spent on average about 15% of its remaining funds per year. Now the target has been reduced to approximately 5% per year, to be achieved after 2030. This is a strategic maneuver aimed at ensuring the organization's resilience to external pressure without requiring massive budgets.
What is the Foundation losing and where will resources go?
Buterin did not sugarcoat the situation. He spoke respectfully of departing employees, calling them "brilliant people and dedicated engineers," some of whom had worked on the Ethereum protocol for nearly a decade. This is not just "increased efficiency," but real losses for the team.
Despite the cuts, ambitions for protocol development are not diminishing. A key focus becomes the Ethereum Strawmap — a comprehensive roadmap intended to replace and supplement every part of the protocol: consensus, proofs, privacy, account models, and state management. Buterin calls this the third iteration of Ethereum after The Merge.
One of the main changes will be a shift in the "multi-client" model. Previously, network security relied on redundancy: a bug in one client would not halt the network. Now, the Foundation is more actively exploring formal verification using artificial intelligence. This is a more efficient, but also more complex, approach.
Changes will affect other areas as well. 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. 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 using his own resources.
Long-term vision for the protocol
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 largely 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 for inspiration, rather than "bloated projects with millions of lines of code." This signals a transition to a more restrained model of network development.
My analysis: The 40% budget cut at the EF is not just austerity, but a fundamental paradigm shift. The Foundation is abandoning its role as the "mega-sponsor" of all ecosystem initiatives and moving toward a more focused, almost "Bitcoin-like" governance model. This could lead to short-term turbulence, but in the long run, to greater decentralization and resilience for Ethereum. The departure of talented engineers is a concerning signal, but the bet on formal verification and AI could open a new chapter in network security.