The Ethereum Foundation under the knife: Buterin confirms a 40% budget cut and departure of key personnel
The Ethereum Foundation (EF) is entering a phase of strict financial optimization. Co-founder Vitalik Buterin has officially announced a reduction of the foundation's annual budget by approximately 40%. This is not just "increased efficiency"—it is a deep restructuring that has already led to the loss of several talented specialists.
According to Buterin, the new budget planning was already embedded in last year's treasury management policy. Previously, the EF spent about 15% of its remaining funds annually. Now, the foundation is moving toward a target of roughly 5% per year, which it plans to achieve after 2030. The key goal is to ensure the organization's resilience to external pressure without the need for large budgets.
Personnel Losses and Shifting Priorities
Buterin did not describe the situation as "simple efficiency improvements." He emphasized his respect for departing colleagues, calling them "brilliant people and dedicated engineers," some of whom had worked on the Ethereum protocol for nearly a decade. This is a loss the foundation is not trying to mask.
Despite the cuts, ambitions for protocol development remain undiminished. The key focus remains the "Ethereum Strawmap"—a comprehensive roadmap aimed at replacing and enhancing 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 major changes will be a shift in the "multi-client" model. Previously, the main security strategy relied on redundancy: if an error occurred in one client, the network continued to operate. Now, the foundation is increasingly exploring another approach—formal verification using artificial intelligence.
Changes will also affect other areas. The Privacy and Scaling Explorations (PSE) unit is being dissolved 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 funded by the foundation will decrease. As Buterin previously announced, he will personally cover some of these initiatives using his own funds.
Long-Term Vision: "Soft Conclusion"
In the long term, Buterin advocates for an approach he calls a "soft conclusion." In his assessment, once 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 set significantly higher.
As a benchmark, Buterin suggested looking to Bitcoin as an example, rather than "cumbersome projects with millions of lines of code." This signals a shift toward a more restrained model of network development.
Cryptalist Analysis: The EF's decision is not just about saving money, but a strategic pivot. The foundation is consciously stepping away from the role of a "super-organization" that funds everything and transitioning to a "security core" role. The loss of personnel is a painful but necessary stage in the ecosystem's maturation. The market should view this not as a weakness, but as a sign of maturity and readiness for long-term sustainability without external funding. The question is whether the community can fill the resulting vacuum of initiatives.