The Ethereum Foundation under the knife: Buterin confirms 40% budget cut and loss of key personnel
The Ethereum ecosystem is entering a phase of austerity. Co-founder Vitalik Buterin confirmed that the Ethereum Foundation (EF) is cutting its operational budget by approximately 40% this year. This is not just "cost optimization"—it is a deliberate shift toward a long-term endowment model, which has required difficult personnel decisions.
According to Buterin, until 2026, the foundation spent on average about 15% of its remaining funds annually. Now, the target is being reduced to ~5% per year, which is planned to be achieved after 2030. The goal is to make the EF as resilient as possible to external pressure, without relying on large and constantly growing budgets.
Loss of "brilliant minds" and shifting priorities
Buterin did not describe what is happening as simple "efficiency improvement." He openly acknowledged that the foundation is losing "brilliant people and dedicated engineers," some of whom have worked on the Ethereum protocol for nearly a decade. This is not just a staff reduction—it is a loss of deep expertise accumulated over years.
However, despite the budget cuts, ambitions for protocol development are not diminishing. The key focus is becoming the Ethereum Strawmap—a massive roadmap that, according to Buterin, is intended to replace and enhance every part of the protocol: from consensus and proofs to privacy and account models. This is, in essence, the third iteration of Ethereum after The Merge.
One of the main changes will be a shift from the "multiple clients" strategy (where redundancy was the main defense) to formal verification using artificial intelligence. Additionally, 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 will take on some of these initiatives using his personal funds.
"Soft endgame" and lessons from Bitcoin
In the long term, Buterin advocates for an approach he calls the "soft endgame." After the Strawmap roadmap is implemented, he believes 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.
As a benchmark, Buterin suggested looking to Bitcoin as an example, rather than "cumbersome projects with millions of lines of code." This signals a shift toward a more restrained and conservative model of network development.
Cryptalist Analysis: The 40% budget cut by the EF is not a crisis but a strategic maneuver. Ethereum is transitioning from a phase of aggressive growth and experimentation to a phase of maturity and stabilization. The loss of key personnel is a painful but inevitable process in such a transformation. However, the focus on formal verification and AI, along with an orientation toward the Bitcoin model, indicates that the team is prioritizing reliability and security over the speed of introducing new features. This may slow the pace of innovation but will significantly strengthen the network's foundation in the long term. The market should view this as a sign of Ethereum's maturation, not its weakening.