Ethereum Foundation under the knife: Buterin confirms 40% budget cut and departure of key developers
Vitalik Buterin has officially confirmed that the Ethereum Foundation (EF) is entering a phase of austerity. This year, the foundation's budget will be cut by approximately 40%, and as the creator of Ethereum himself admits, this will entail a number of painful but necessary decisions.
According to my analysis, this is not just "cost optimization" but a fundamental shift in treasury management paradigm. Previously, the EF spent about 15% of its remaining funds per year. The new goal is to reduce this figure to ~5% per year, which will only be achieved after 2030. The foundation aims to become as resilient as possible to external pressure, without relying on large budgets.
The Cost of Optimization: Losing "Brilliant Minds"
Buterin did not sugarcoat reality. He stated directly that he respects his colleagues too much to pretend nothing is happening. He described the departing employees as "brilliant people and dedicated engineers," some of whom have worked on the Ethereum protocol for nearly ten years. This is not just a loss of personnel — it is a loss of institutional memory and deep expertise.
Despite the cuts, the EF's ambitions in protocol development are not diminishing. The key focus remains the Ethereum Strawmap — a massive roadmap intended to be the third iteration of Ethereum after The Merge. It covers consensus, proofs, privacy, account models, and network state management.
One of the main changes will be abandoning the "redundancy" strategy in favor of formal verification using artificial intelligence. Previously, network security was ensured by multiple clients: if an error occurred in one, the network continued operating. Now the EF is betting on mathematically verified code.
Structural Overhaul and Buterin's Personal Funds
Changes will also affect other areas. The Privacy and Scaling Explorations (PSE) division is being wound down as a separate unit. The Devcon conference will become more modest and less costly. The number of large-scale projects outside of Ethereum from the foundation will decrease. Notably, as Buterin previously announced, he is taking on some of these initiatives using his personal funds.
In the long term, Vitalik advocates for an approach he calls "soft completion." After the Strawmap is implemented, the foundation should largely limit itself to security fixes and minor valuable changes. The bar for adding new features to the protocol should be set significantly higher.
My Analysis and Conclusions
As an analyst, I see this decision not as a crisis, but as Ethereum's maturation. The budget cuts and loss of talent are the price for transitioning from a "startup mindset" to a long-term endowment model. Buterin suggests taking a cue from Bitcoin, rather than from "bloated projects with millions of lines of code." This is a signal to the market: Ethereum is betting on resilience and predictability, not endless expansion. The question is whether the ecosystem can maintain its pace of innovation under austerity conditions. For now, according to the creator's assessment, the network is well-prepared for this challenge.