The Ethereum Foundation is in austerity mode: Buterin confirms a 40% budget cut and the departure of key personnel
The Ethereum Foundation (EF) is entering a new era—an era of radical optimization. Co-founder Vitalik Buterin has officially confirmed that the foundation's budget will be cut by approximately 40% this year. According to him, this decision is a direct consequence of the transition to a long-term endowment model, which was established in last year's treasury management policy.
Buterin explained the mechanics of the new course in detail. Previously, the EF spent about 15% of its remaining treasury funds annually. Now, the foundation is moving toward a target of 5% per year, which will be achieved after 2030. The key goal is to ensure the organization's resilience to external pressure without relying on large budgets. The spending cuts inevitably entail personnel losses. Buterin spoke respectfully of the departing employees, calling them "brilliant people and dedicated engineers," some of whom had worked on the Ethereum protocol for nearly a decade. He emphasized that he does not intend to pretend nothing is happening—this is a loss for the foundation.
New Development Vector: Strawmap and Formal Verification
Despite the budget cuts, Ethereum's ambitions in protocol development have not disappeared. On the contrary, they are becoming more focused. Buterin identified the so-called Ethereum Strawmap as a key direction—a comprehensive roadmap designed to replace and supplement every element of the protocol: consensus, proofs, privacy, account model, and network state management. In essence, this is the third iteration of Ethereum after The Merge.
One of the main changes will be a shift in the "multiple clients" model. While security was previously ensured through redundancy (a failure of one client would not paralyze the network), the EF is now increasingly exploring an alternative approach—formal verification using artificial intelligence. This is a more efficient and less resource-intensive way to guarantee code correctness.
Changes will also affect other structures. 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, and the number of large-scale projects outside Ethereum supported by the foundation will decrease. As Buterin previously announced, he will take on some of these initiatives using his personal funds.
Gentle Shutdown and Conservative Approach
In the long term, Buterin advocates for an approach he calls a "gentle shutdown." After the Strawmap roadmap is implemented, he believes the foundation should mainly limit itself to security fixes and minor valuable changes. The bar for adding new features to the protocol should be significantly raised. In his view, this approach will allow Ethereum to remain resistant to capture without requiring huge budgets. As a benchmark, Buterin suggested looking to Bitcoin rather than "cumbersome projects with millions of lines of code," thereby signaling a shift toward a more restrained model of network development.
Analyst's Comment: The 40% budget cut at the EF is not just a financial adjustment but a change in the philosophy of managing the entire ecosystem. The transition from an "active growth" strategy to a "conservative endowment" model signals that Ethereum is betting on self-sufficiency and resilience rather than expansion. This is a mature and pragmatic step, which, however, may slow the pace of some innovations in the short term. The departure of key engineers is a worrying sign, but the reorientation toward formal verification methods could become a long-term competitive advantage.