Ethereum Foundation reduces budget by 40%: Vitalik Buterin reveals 'soft landing' strategy
Ethereum co-founder Vitalik Buterin has officially confirmed that the Ethereum Foundation (EF) is cutting its operational budget by approximately 40% this year. According to him, this decision was embedded in last year's treasury management policy and entails a series of difficult personnel decisions.
Key shift: the foundation is transitioning from an active spending model to a long-term endowment mode. Previously, the EF spent about 15% of its remaining funds annually; now the target is approximately 5% per year, to be achieved after 2030. This is a fundamental change in resource management philosophy, aimed at ensuring resilience to external pressure without the need for large budgets.
What is the foundation losing and where are resources being directed?
Buterin emphasizes that this is not merely an "efficiency improvement." He describes the departing employees as "brilliant people and dedicated engineers," some of whom have worked on the Ethereum protocol for nearly a decade. This is a loss of expertise that cannot be ignored.
Despite the cuts, ambitions for protocol development are not diminishing. The top priority is the Ethereum Strawmap roadmap — the third iteration of the network after The Merge. It covers consensus, proofs, privacy, account models, and state management.
One key change is a shift in security strategy. Instead of redundancy (multiple clients), the EF is now actively researching formal verification using artificial intelligence. This is a more complex but potentially more effective approach.
Structural changes will also affect:
- Privacy and Scaling Explorations (PSE) — the unit is being wound down as a separate entity.
- Devcon — the conference will become more modest and less costly.
- Large-scale projects outside Ethereum — their number from the foundation will decrease. Some initiatives, as Buterin previously announced, he will fund personally.
Long-term vision: "soft endgame"
Buterin suggests looking to Bitcoin rather than "cumbersome projects with millions of lines of code." After the Strawmap is implemented, the foundation should largely limit itself to security fixes and small, valuable changes. The bar for adding new features to the protocol should become significantly higher. This is a "soft endgame" strategy — maintaining resistance to capture without inflated budgets.
Expert comment (Cryptalist): This is a bold and logical step. The Ethereum Foundation is maturing, transitioning from a startup phase to managing a mature ecosystem. However, the loss of "brilliant engineers" is a serious risk. The question is whether the community and new decentralized teams can compensate for this talent drain. A 40% budget cut is not just about savings; it's a bid for a new governance model where the foundation's role will be more coordinating than directive. The success of this strategy will determine whether Ethereum can maintain its leadership in the race for scalability and security.