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. Co-founder of the network, Vitalik Buterin, confirmed that the Ethereum Foundation (EF) is cutting its operational budget by approximately 40% this year. This is not just "optimization"—it is a forced measure that has already led to the loss of several key developers who had worked on the protocol for nearly a decade.
Buterin states directly: he respects his departing colleagues too much to call this "efficiency improvement." This is a real loss for the team. However, according to him, the goal was set in last year's treasury management policy: the foundation is transitioning from a model of spending 15% of remaining funds annually to a long-term endowment. The target is to reduce annual expenses to 5%, which will only be achieved after 2030.
Where resources are going and what is changing in priorities
Despite the budget cuts, ambitions for protocol development are not decreasing. The main focus is the Ethereum Strawmap roadmap, which Buterin calls the third iteration of Ethereum after The Merge. This plan covers consensus, proofs, privacy, the account model, and network state management.
A key change is a shift in security strategy. Previously, the emphasis was on redundancy: a single client failure would not paralyze the network. Now, the foundation is actively researching formal verification using artificial intelligence. This is a more complex but potentially more effective approach.
Structural changes will also affect the Privacy and Scaling Explorations (PSE) division, which is being wound down as a separate unit. The Devcon conference will become more modest and cheaper, and the number of large-scale projects outside of Ethereum conducted on behalf of the foundation will be reduced. Buterin is taking some initiatives under his personal funding.
Long-term vision: "soft completion"
In the long term, Buterin advocates for a "soft completion" model. After the Strawmap is implemented, the foundation should focus only on security fixes and small but valuable changes. The bar for adding new features to the protocol should be raised significantly.
He cites Bitcoin as a benchmark, rather than "cumbersome projects with millions of lines of code." This signals a shift toward a more restrained network development model, resilient to external pressure and not requiring huge budgets.
Cryptalist Analysis: The 40% budget cut at the EF is not a crisis, but a deliberate transition to a "survival mode" and stability. The loss of personnel is painful, but the focus on formal verification and AI could become the technological breakthrough that elevates Ethereum to a new level of security without needing to maintain a large staff. The market should view this as a sign of maturity, not weakness.