The Ethereum Foundation is cutting its budget by 40%: Buterin confirms the loss of key personnel
Ethereum co-founder Vitalik Buterin has officially confirmed that the Ethereum Foundation (EF) is cutting its operational budget by approximately 40% this year. According to him, this decision entails a series of painful but necessary measures, including the loss of some highly skilled personnel.
Buterin explained that the goal of this reduction was embedded in the foundation's treasury management policy last year. The foundation is systematically transitioning from an active spending model to a long-term endowment model. Previously, the EF spent about 15% of its remaining funds annually, but now the target is being reduced to 5% per year, with plans to reach this level after 2030. Thus, the organization aims for financial stability that does not depend on large and unpredictable budget injections.
What the foundation is losing and where resources are being directed
Buterin emphasized that what is happening is not just "increased efficiency" but a real loss of talent. He described the departing employees as "brilliant people and dedicated engineers," some of whom had worked on the Ethereum protocol for nearly ten years. This statement is a rare acknowledgment that even the strongest ecosystems have limits to growth and resources.
Despite the cuts, the EF does not intend to reduce its ambitions in developing the protocol itself. The key focus remains the Ethereum Strawmap — a massive roadmap designed to replace and supplement every key component of the network: consensus, proofs, privacy, account models, and state management. Buterin calls this the "third iteration of Ethereum" after The Merge.
One of the main changes will be a shift in the "multi-client" model. Previously, security was built on redundancy: a bug in one client would not paralyze the network. Now, the foundation is actively exploring another approach — formal verification using artificial intelligence. This could fundamentally change the network's security architecture.
Changes will also occur in the foundation's structure. 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 of Ethereum from the EF will decrease. As Buterin previously announced, he is taking on some of these initiatives himself using personal funds.
Long-term vision of the protocol
In the long term, Buterin advocates for an approach he calls a "soft endgame." In his assessment, after the Strawmap roadmap is implemented, the foundation should mainly limit itself to security fixes and small valuable changes. The bar for adding new features to the protocol should be significantly raised.
As a benchmark, he suggested looking to Bitcoin rather than "cumbersome projects with millions of lines of code." This signals a shift toward a more restrained, conservative model of network development, where stability and resistance to capture are valued more than the speed of innovation.
Cryptalist analytical conclusion: The 40% budget cut at the EF is not a crisis but a deliberate strategy of transitioning from a phase of aggressive growth to one of maturity and sustainability. Ethereum, while losing some of its "brilliant engineers," is simultaneously laying the foundation for a more decentralized and financially independent future. However, the loss of key personnel always poses a risk to innovative potential, and how quickly the ecosystem can fill this gap will be the main test for the network in the coming years.