The Ethereum Foundation under the knife: Buterin confirms 40% budget cut and departure of key personnel
The Ethereum ecosystem is entering a phase of austerity. Network co-founder Vitalik Buterin has officially confirmed that the Ethereum Foundation (EF) is cutting its operational budget by approximately 40% this year. This is not just "cost optimization," but a deep structural reorganization that has already led to the loss of several key employees.
According to Buterin, this radical reduction was embedded in the treasury management policy last year. Previously, the foundation spent about 15% of its remaining reserves annually. The new strategy involves gradually reducing this figure to a target of 5% per year, which will only be achieved after 2030. Thus, the EF is transitioning to a long-term endowment model, aiming for financial sustainability independent of large external infusions.
Buterin did not soften his wording: he openly described the departing colleagues as "brilliant people and dedicated engineers," some of whom had worked on the protocol for nearly a decade. This is an acknowledgment of the loss of significant intellectual capital.
Where will resources go and what will be scaled back?
The budget cut does not mean development will stop. The key priority remains the large-scale Ethereum Strawman roadmap — what Buterin calls "the third iteration of Ethereum after The Merge." This plan covers consensus, proofs, privacy, account models, and state management.
However, the foundation is restructuring. The Privacy and Scaling Explorations (PSE) unit is being wound down as an independent entity. The Devcon conference will become more modest and less costly. The number of major projects outside of Ethereum funded by the EF will be reduced. Notably, as Buterin previously stated, he is taking on personal funding for some of these initiatives.
In security strategy, there is a shift from the "redundancy" paradigm (where a failure in one client does not bring down the network) towards formal verification using artificial intelligence tools.
Vision of a "soft finish"
In the long term, Buterin sees Ethereum's future in a "soft finish" model. After the Strawman roadmap is implemented, the foundation should focus only on security fixes and minor valuable changes. The bar for adding new features to the protocol should become significantly higher.
As a benchmark, he suggests looking to Bitcoin rather than "bloated projects with millions of lines of code." This signals a shift towards a more restrained and conservative model of network development.
Cryptalist Commentary: The 40% budget cut by the EF is not a sign of weakness, but a forced yet mature step. The foundation is preparing for a long market cycle and is abandoning the role of a "feeding trough" for everyone. The loss of talented personnel is a worrying signal, but if Strawman is implemented, Ethereum will gain a more sustainable and decentralized foundation than many competitors spending millions on marketing.