The Ethereum Foundation is cutting its budget by 40%: Buterin confirms staff losses and a strategic shift
Ethereum co-founder Vitalik Buterin has officially announced a radical 40% budget cut for the Ethereum Foundation (EF) in the current year. According to him, this decision has already led to painful but necessary changes in the foundation's structure, including the loss of key specialists.
New Treasury Management Model
Buterin explained that the goal of reducing expenses was embedded in last year's treasury management policy. Previously, the EF spent about 15% of its remaining funds annually. The new strategy involves gradually reducing this figure to a target of 5% per year, which will be achieved after 2030. The foundation aims for resilience against external pressure without relying on large budgets.
Personnel Losses and Resource Reallocation
Buterin did not describe the situation as a simple "efficiency improvement." He emphasized his respect for departing colleagues—"brilliant people and dedicated engineers," some of whom have worked on the Ethereum protocol for nearly a decade. Despite the cuts, the foundation does not intend to lower its ambitions in protocol development.
The key focus remains the Ethereum Strawmap—a large-scale roadmap designed to replace and supplement every part of the protocol: consensus, proofs, privacy, account model, and state management. Buterin calls this the third iteration of Ethereum after The Merge.
Shift in Security Strategy
One of the main changes will be abandoning the "multiple clients" strategy as the primary means of ensuring security. Previously, redundancy allowed the network to continue operating if one client had an error. Now, the foundation is more actively exploring formal verification using artificial intelligence.
Scaling Back Initiatives
Changes will also affect other areas. 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. The number of large-scale projects outside of Ethereum from the foundation will decrease. As Buterin previously announced, he will personally fund some of these initiatives using his own resources.
Long-Term Vision: "Soft Endgame"
In the long term, Buterin advocates for an approach he calls the "soft endgame." After 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 significantly raised. This approach will allow Ethereum to remain resistant to capture without requiring large budgets.
As a benchmark, Buterin suggested looking to Bitcoin rather than "cumbersome projects with millions of lines of code." This signals a shift toward a more restrained model of network development.
Expert Commentary from Cryptalist
The Ethereum Foundation's decision is not just about budget savings but a fundamental reassessment of development philosophy. The transition to a "soft endgame" model and the shift from redundancy to formal verification signal the ecosystem's maturation. However, the loss of "brilliant people" always carries risk. The question is whether the Ethereum community can compensate for this outflow through decentralized initiatives and external developers. For now, the market is assessing these changes neutrally, but the long-term consequences could be significant.