The Ethereum Foundation is cutting its budget by 40%: Buterin on losses and new strategy
Ethereum co-founder Vitalik Buterin confirmed that the Ethereum Foundation (EF) is cutting its budget by approximately 40% this year. He emphasizes that this decision is linked to a transition towards a long-term endowment model and entails a number of difficult personnel and organizational decisions.
According to Buterin, until 2026, the foundation spent an average of about 15% of its remaining funds annually. Now the target is being reduced to approximately 5% per year, to be achieved after 2030. The goal is to ensure the organization's resilience to external pressure without the need for large budgets.
What the foundation is losing and where resources are going
Buterin refused to call what is happening a simple "efficiency increase." He spoke respectfully of the employees leaving the foundation, calling them "brilliant people and dedicated engineers," some of whom had worked on the Ethereum protocol for nearly ten years. This is not just optimization, but a real loss of valuable personnel.
Despite the cuts, ambitions for protocol development are not diminishing. Buterin identifies the Ethereum Strawmap as a key direction — a massive roadmap aimed at updating and supplementing every part of the protocol: consensus, proofs, privacy, account model, and state management. This, he says, is the third iteration of Ethereum after The Merge.
One of the main changes will be a shift in the "multi-client" model. Previously, the main security strategy was built on redundancy: if an error occurred in one client, the network continued to operate. Now, the foundation is more actively exploring another approach — formal verification using artificial intelligence.
Changes will also affect other areas. The Privacy and Scaling Explorations (PSE) division is being wound down as a separate unit, the Devcon conference will become more modest and less costly over time, and the number of large-scale projects outside of Ethereum from the foundation will decrease. As Buterin previously announced, he is taking on some of these initiatives using his personal funds.
Long-term vision for the protocol
In the long term, Buterin advocates for an approach he called a "soft finish." In his assessment, after the implementation of the Strawmap roadmap, the foundation should mainly limit itself to security fixes and small, valuable changes.
The bar for adding new features to the protocol should become significantly higher. This approach will allow Ethereum to remain resistant to capture without requiring large budgets. As a benchmark, Buterin suggested taking a cue from Bitcoin, rather than from "bloated projects with millions of lines of code," thereby signaling a shift towards a more restrained model of network development.
Buterin acknowledged that recent years have been a difficult period for Ethereum. However, in his assessment, the ecosystem is adapting both within and outside the foundation. The network is well prepared to develop successfully.
Cryptalist Analysis: The 40% budget cut at the EF is not just a forced measure, but a strategic step aimed at long-term sustainability. However, the loss of "brilliant people" could slow down innovation in the short term. The shift towards a more conservative development model, analogous to Bitcoin, signals Ethereum's maturity, but also an acknowledgment that the era of expansive growth funded by the foundation is coming to an end. The market should closely monitor how these changes affect the pace of implementing new features in the protocol.