The Ethereum Foundation is cutting its budget by 40%: Buterin confirmed tough measures and 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 was embedded in treasury management policy last year and entails a series of painful but necessary changes. The foundation is shifting from an annual spending model to a long-term endowment strategy.
Buterin explained that until 2026, the EF spent on average about 15% of its remaining funds per year. Now, the target is being reduced to approximately 5% per year, to be achieved after 2030. The key goal is to ensure the organization's resilience to external pressure without requiring massive budgets.
What the foundation loses and where resources are directed
Vitalik did not describe the situation as "increased efficiency." He emphasized that he respects his colleagues too much to pretend nothing has been lost. He called the departing employees "brilliant people and dedicated engineers," some of whom had worked on the Ethereum protocol for nearly a decade.
Despite the cuts, ambitions for protocol development are not diminishing. Buterin identified Ethereum Strawmap as a key direction — a large-scale roadmap designed to replace and supplement every part of the protocol: consensus, proofs, privacy, account model, and state management. According to him, this is 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 ensured through redundancy; now, the foundation is actively exploring formal verification using artificial intelligence.
Changes 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 large-scale projects outside Ethereum from the foundation will decrease. As Buterin previously announced, he will personally fund some of these initiatives using his own resources.
Long-term vision for the protocol
In the long term, Buterin advocates for an approach he calls "soft finality." In his assessment, after the Strawmap roadmap is implemented, the foundation should mainly limit itself to security fixes and minor valuable changes. The bar for adding new features to the protocol should be significantly raised. This approach will allow Ethereum to remain resistant to capture without requiring large budgets.
As a benchmark, Buterin suggested looking to Bitcoin rather than "cumbersome projects with millions of lines of code." This signals a shift toward a more restrained model of network development.
Expert opinion: The 40% budget cut at the EF is not just optimization but a strategic pivot. The foundation is moving away from the role of a "grant dispenser" and focusing on fundamental research. The departure of veterans is a worrying signal, but the bet on formal verification and AI could dramatically improve protocol reliability. However, the key risk is a slowdown in innovation amid aggressive development by competing L1 networks.