The Ethereum Foundation: Budget cut by 40%, key developers leaving — Vitalik Buterin reveals details
Ethereum co-founder Vitalik Buterin has officially confirmed that the Ethereum Foundation (EF) is reducing its operational budget by approximately 40% this year. According to him, this decision was already embedded in last year's treasury management policy, and the foundation is now transitioning to a long-term endowment model.
Buterin explained that until 2026, the EF was spending about 15% of its remaining funds annually. Now, the target is being reduced to roughly 5% per year, which will be achieved after 2030. This means the organization is aiming for financial stability that does not depend on large and unpredictable budgets.
However, the budget cut is not just about "optimization." Buterin directly acknowledges the loss of valuable personnel. He described 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 recognition that the foundation is losing not just resources, but key intellectual capital.
Where resources are going and what is changing
Despite the budget cuts, ambitions for developing the protocol itself are not diminishing. Buterin identified the Ethereum Strawmap as a key direction—a massive roadmap designed to replace and supplement every part of the protocol: consensus, proofs, privacy, account models, and state management. According to him, this 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 redundancy: if an error occurred in one client, the network continued to operate. Now, the foundation is actively exploring another approach—formal verification using artificial intelligence.
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, 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 calls "soft finality." According to his assessment, once 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, in his view, will allow Ethereum to remain resistant to capture without requiring large budgets. As a benchmark, Buterin suggested looking to Bitcoin as an example, rather than "bloated projects with millions of lines of code." This signals 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 the foundation and beyond. The network is well-prepared to develop successfully in the new realities.
My analysis: The 40% budget cut at the EF is not just a financial adjustment, but a strategic pivot. The foundation is moving from an "active growth" model to a "sustainable management" model. This may slow down the pace of introducing new features but will enhance the network's long-term stability. However, the loss of key engineers is an alarming signal that could impact development quality in the coming years.