The Ethereum Foundation cuts its budget by 40%: Buterin acknowledges the loss of key personnel
Ethereum co-founder Vitalik Buterin confirmed that the Ethereum Foundation (EF) is cutting its operational budget by approximately 40% this year. According to him, this decision is part of a long-term treasury management strategy aimed at transitioning to an endowment model. However, as Buterin himself admits, the optimization has resulted in the loss of valuable employees.
Tough Austerity and Personnel Losses
Buterin did not describe the situation as an "efficiency improvement." On the contrary, he emphasized that the foundation is losing "brilliant people and dedicated engineers," some of whom have worked on the Ethereum protocol for nearly a decade. Along with the staff reduction, the spending model is also changing. Previously, the EF spent on average about 15% of its remaining treasury per year. Now, the goal is to reach a rate of 5% annually, which will be achieved after 2030. This requirement ensures the foundation's resilience to external pressure without needing large budgets.
New Priorities: Strawmap and a Paradigm Shift
Despite the budget cuts, the EF is not reducing its ambitions in protocol development. The key focus becomes the Ethereum Strawmap—a comprehensive roadmap designed to replace and enhance every part of the protocol: consensus, proofs, privacy, account model, and state management. Buterin calls this the third iteration of Ethereum after The Merge.
One of the major 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 a different approach—formal verification using artificial intelligence. This is a radical change in philosophy.
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. The number of large-scale projects outside of Ethereum from the foundation will decrease. As Buterin previously announced, he will take on some of these initiatives using his personal funds.
Long-Term Vision: "Soft Completion"
Buterin advocates for an approach he calls "soft completion." 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. This approach, in his view, will allow Ethereum to remain resistant to capture without requiring large budgets.
As a benchmark, Buterin suggested taking inspiration from Bitcoin, rather than "cumbersome projects with millions of lines of code." This signals a transition to a more restrained model of network development.
Buterin acknowledged that recent years have been a difficult period for Ethereum. However, in his assessment, the ecosystem is adapting both within and outside the foundation. The network is well-prepared to develop successfully.
Expert Opinion: The 40% budget cut at the EF is not just financial optimization but a shift in ideological paradigm. By losing key engineers, the foundation risks slowing the pace of innovation, but the transition to a "soft completion" model and the focus on formal verification could make Ethereum more stable and secure in the long term. This is a bet on network maturity, not expansion.