The Ethereum Foundation under the knife: Buterin confirms 40% budget cut and departure of key staff
Ethereum co-founder Vitalik Buterin has officially confirmed that the Ethereum Foundation (EF) is entering a phase of austerity. The organization's budget will be cut by approximately 40% this year. This is not just "cost optimization," as corporations like to call it, but a forced and painful transformation that has already led to the loss of valuable personnel.
A New Financial Reality
Buterin directly stated that calling what is happening "increased efficiency" would be disrespectful to the employees leaving the foundation. He described them as "brilliant people and dedicated engineers," some of whom have worked on the Ethereum protocol for nearly a decade. The goal is to transition from spending about 15% of remaining funds annually to a target of 5% per year. This milestone is planned to be achieved only after 2030. The foundation aims to become resilient to external pressure without requiring huge budgets, meaning the current cuts are just the first step toward a long-term "endowment" model.
Where Resources Are Going and Who Will Remain
Despite the budget cuts, ambitions for developing the protocol itself remain unchanged. The main priority becomes the Ethereum Strawmap roadmap — what Buterin calls "the third iteration of Ethereum after The Merge." This plan covers consensus, proofs, privacy, account models, and network state management.
However, everything comes at a cost. 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 over time. The number of large-scale projects outside of Ethereum that the foundation funds will decrease. As Buterin previously announced, he will personally fund some of these initiatives using his own resources.
A Paradigm Shift: From Redundancy to Verification
A key change in security strategy is the abandonment of the "multiple clients" model as the primary shield. Previously, the strategy relied on redundancy: if an error occurred in one client, the network continued operating through others. Now, the foundation is actively exploring a different approach — formal verification using artificial intelligence. This is a more complex but potentially more reliable path.
In the long term, Buterin advocates for a "soft end" to active development. After implementing the Strawmap, the foundation should mostly limit itself to security fixes and small, valuable changes. The bar for adding new features to the protocol should be significantly raised. As a benchmark, he suggests looking to Bitcoin rather than "cumbersome projects with millions of lines of code."
Expert opinion: Buterin's decision is not panic, but the maturation of the ecosystem. Ethereum is transitioning from a stage of aggressive growth and experimentation to a phase of conservation and resilience. The departure of "brilliant people" is an inevitable loss, but the bet on formal verification and a long-term endowment signals that the foundation is preparing for decades of existence, not a race for quarterly metrics. The market should perceive this as a sign of maturity, not weakness.