Ethereum Foundation in austerity mode: Buterin confirms 40% budget cut and staff losses
The Ethereum Foundation (EF) is entering a phase of major financial restructuring. Ethereum founder Vitalik Buterin confirmed that the foundation's budget will be cut by approximately 40% this year. According to him, this decision is part of a long-term treasury management strategy laid out last year and entails a number of difficult but necessary steps.
According to the announced plans, until 2026, the EF was spending about 15% of its reserves annually. The new target model aims to reduce this figure to roughly 5% per year, which will be achieved after 2030. The foundation is striving for financial sustainability, minimizing dependence on large budget injections and external pressure. This is not just "cost optimization," but a fundamental shift in the philosophy of resource management.
Personnel Losses and Resource Reallocation
Buterin was candid, refusing to call the process "efficiency improvement." He emphasized that he deeply respects the employees leaving the organization, calling them "brilliant people and dedicated engineers," some of whom have worked on the Ethereum protocol for nearly a decade. The departure of such talent is a tangible loss for the ecosystem.
Despite the cuts, ambitions for protocol development remain undiminished. The key direction announced is the Ethereum Strawman roadmap — a major development iteration that, according to Buterin, will become the third era of Ethereum after The Merge. It aims to modernize every aspect of the protocol: consensus, proofs, privacy, account model, and network state management.
One of the landmark changes will be moving away from the "multi-client" strategy as a primary security element. Previously, the network relied on redundancy: a bug in one client would not paralyze the entire system. Now, the EF is actively exploring an alternative approach — formal verification using artificial intelligence to check code correctness.
The restructuring 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 major external projects funded by the foundation will decrease. Buterin previously announced that he will personally finance some of these initiatives.
Long-Term Vision: Betting on "Soft Completion"
In the long term, Buterin advocates for an approach he called "soft completion." In his assessment, after the Strawman roadmap is implemented, the foundation should mainly focus on security fixes and small but valuable changes. The bar for adding new features to the protocol should be significantly raised.
As a benchmark, he suggests looking to Bitcoin rather than "bloated projects with millions of lines of code." This signals a shift towards a more restrained model of network development, where stability and security are valued more than the speed of innovation.
Buterin acknowledges that recent years have been a difficult period for Ethereum but expresses confidence that the ecosystem will adapt both within the foundation and beyond. In his view, the network is well-prepared to thrive under the new conditions.
Cryptalist Analysis: The EF's decision for a 40% budget cut is not a crisis but a mature step towards long-term sustainability. The departure of talented engineers is a painful but perhaps inevitable price for transitioning from an "unlimited budget startup" model to a more disciplined and decentralized structure. The market will perceive this as a sign of Ethereum's maturation, but investors should closely monitor how these changes impact the development pace of key protocol upgrades.