The Ethereum Foundation enters an era of austerity: budget cut by 40%, staff losses inevitable
The Ethereum ecosystem is undergoing tectonic shifts. Project founder Vitalik Buterin has confirmed that the Ethereum Foundation (EF) is cutting its operational budget by approximately 40% this year. This is not merely "cost optimization," but a fundamental overhaul of treasury management strategy, entailing painful yet necessary personnel decisions.
Buterin states bluntly that "budget cuts" is a euphemism. In reality, the foundation is losing brilliant engineers and dedicated specialists, some of whom have devoted nearly a decade to protocol development. However, he says this is a forced measure to transition to a long-term endowment model. Previously, the EF spent about 15% of remaining funds annually; now the target is 5% per year, to be achieved by 2030. This approach aims to ensure the organization's resilience to external pressure without requiring massive budgets.
Where resources are going and what is changing in the protocol
The budget cut does not mean development stops. On the contrary, Buterin emphasizes a new roadmap — Ethereum Strawmap. This is the third iteration of the protocol after The Merge, designed to rethink and supplement every key element: consensus, proofs, privacy, account model, and network state management.
One of the most significant shifts will be abandoning the "multi-client" strategy in favor of formal verification using artificial intelligence. Previously, network security relied on redundancy: a bug in one client did not paralyze the entire system. Now the foundation is betting on mathematically verified code.
Additionally, the Privacy and Scaling Explorations (PSE) unit is being disbanded as a separate entity, the Devcon conference will become more modest and less costly, and the number of large-scale projects outside Ethereum from the foundation will decrease. As Buterin previously announced, he will fund some such initiatives from personal funds.
Long-term vision: "soft finish"
In the long term, Buterin sees Ethereum's future in a "soft finish" paradigm. After implementing Strawmap, the foundation should limit itself to security fixes and small but valuable changes. The bar for adding new features to the protocol should be set significantly higher.
As a benchmark, Buterin suggests looking to Bitcoin rather than "cumbersome projects with millions of lines of code." This marks a shift toward a more restrained and conservative model of network development. Recent years have been challenging for Ethereum, but according to the founder, the ecosystem is adapting both inside and outside the foundation, and the network is well-prepared for successful development in the new reality.
Expert opinion: The EF's decision is not panic, but a mature step. The market has long signaled that endless expansion of staff and budget is inefficient. The transition to an endowment model and the bet on formal verification via AI are correct, albeit painful, investments in long-term sustainability. The question is whether Ethereum can maintain its pace of innovation after losing some key personnel.