The Ethereum Foundation under the knife: Buterin confirms 40% budget cut and departure of key personnel
The Ethereum Foundation (EF) is entering a phase of austerity. Network co-founder Vitalik Buterin has officially confirmed that the foundation's budget will be cut by approximately 40% this year. This is not just an optimization of expenses, but a fundamental revision of capital management strategy, which has already led to the loss of several key employees.
Until 2026, the EF was spending about 15% of its remaining reserves annually. The new goal is to reach a rate of about 5% per year, which will only be achieved after 2030. According to Buterin, this approach was already laid out in last year's treasury management policy. The foundation is transitioning to a long-term endowment model, aiming to maintain resilience to external pressure without the need for colossal budgets.
"Brilliant people" are leaving: who and where
Buterin did not describe the situation as an "efficiency improvement." He directly stated that he respects his colleagues too much to pretend nothing has been lost. He characterized the departing employees as "brilliant people and dedicated engineers," some of whom had worked on the Ethereum protocol for nearly ten years. This admission speaks to the depth of the personnel crisis within the organization.
Despite the cuts, ambitions for protocol development are not diminishing. The key direction is the Ethereum Strawmap roadmap — the third iteration of the network after The Merge. It is intended to impact consensus, proofs, privacy, the account model, and state management. One of the main changes will be abandoning the "multiple clients" strategy in favor of formal verification using artificial intelligence.
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. Buterin is taking on some of these initiatives using his personal funds.
Soft completion and the Bitcoin benchmark
In the long term, Buterin advocates for an approach he calls "soft completion." After implementing Strawmap, 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. As a benchmark, he suggested looking to Bitcoin for an example, rather than "cumbersome projects with millions of lines of code."
Recent years have been a difficult period for Ethereum. However, according to Buterin's assessment, the ecosystem is adapting both within the foundation and beyond. The network is well-prepared to successfully develop under the new conditions.
Cryptalist Commentary: The 40% budget cut at the EF is not just a financial measure, but a signal of the ecosystem's maturity. Ethereum is transitioning from a stage of aggressive growth to a phase of sustainable existence, where efficiency is valued more than scale. The departure of experienced engineers is a painful but inevitable process of consolidation. The market should perceive this as a sign that Ethereum is preparing for the long game, not for short-term speculative bursts.