The Ethereum Foundation enters an era of austerity: budget cut by 40%, and the team abandons ship
Ethereum co-founder Vitalik Buterin has confirmed information about a large-scale restructuring of the Ethereum Foundation (EF). This year, the organization is cutting its operational budget by approximately 40%, which inevitably entails a series of painful decisions and personnel changes. This is not just "efficiency optimization," as such steps are often presented, but a deep shift in management paradigm.
Buterin directly stated that the goal of reducing expenses was embedded in the treasury management policy last year. The Foundation is transitioning from a model of spending about 15% of remaining funds annually to a much more conservative long-term endowment strategy. The target is to reduce annual spending to approximately 5%, which will only be achieved after 2030. This means the EF intends to live off the interest on its capital, minimizing dependence on external funding and market conditions.
Personnel Losses and Shift in Priorities
The most noticeable consequence has been the layoff of several key employees. Buterin did not downplay the loss, calling those leaving "brilliant people and dedicated engineers," some of whom had worked on the Ethereum protocol for nearly ten years. This is not just a loss of performers — it is a loss of deep institutional knowledge and historical context.
Resources are being redistributed. The Privacy and Scaling Explorations (PSE) unit is being dissolved as a separate entity. The large-scale Devcon conference will become more modest and less costly. The number of major projects outside of Ethereum sponsored by the foundation will decrease. As Buterin previously announced, he will personally fund some initiatives.
Focus on the Protocol: Strawmap and "Soft Finish"
Despite the cuts, ambitions for developing the protocol itself are not diminishing. The key direction becomes the Ethereum Strawmap roadmap. Essentially, this is the third iteration of Ethereum after The Merge, which aims to affect every aspect of the network: consensus, proofs, privacy, account model, and state management.
One of the main changes is a shift in security strategy. Previously, the emphasis was on redundancy through a "multi-client" model. Now, the foundation is actively exploring formal verification using artificial intelligence. In the long term, Buterin advocates for the concept of a "soft finish." After the implementation of Strawmap, the foundation should mostly limit itself to security fixes and small valuable changes, and the bar for adding new features to the protocol should become significantly higher.
Cryptalist Analysis: This is perhaps the most pragmatic and mature step the Ethereum Foundation has taken in its entire history. Abandoning the "generous funding of everything" model in favor of long-term sustainability and a sharp focus on the core protocol is a sign of maturity. However, the loss of decade-long veterans is an alarming signal. The question is whether the Ethereum community can replicate their expertise, or whether we are witnessing the beginning of an era where innovation will be born not within the EF, but outside it, in more agile and perhaps better-funded structures.