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 inevitably entails a number of painful but necessary measures. The goal is to transition to a long-term endowment model, which implies a fundamental change in the foundation's financial policy.
The New Financial Reality of the EF
Buterin explained that until 2026, the foundation spent on average about 15% of its remaining funds annually. Now, the goal is to reduce this figure to a target of 5% per year, to be achieved after 2030. This approach is intended to ensure the organization's resilience to external pressure without requiring massive budgets. This is not just "increased efficiency," as some try to portray it — it is a fundamental restructuring.
The foundation is losing valuable personnel. Buterin describes the departing employees as "brilliant people and dedicated engineers," some of whom have worked on the Ethereum protocol for nearly a decade. However, despite the cuts, ambitions for developing the protocol itself are not diminishing. The key direction announced is the Ethereum Strawmap roadmap — the third iteration after The Merge, aimed at updating consensus, proofs, privacy, the account model, and network state management.
Shift in Priorities: From Redundancy to Formal Verification
One of the main changes is a shift in security strategy. Previously, the foundation relied on redundancy: a bug in one client would not paralyze the network. Now, the foundation is actively exploring formal verification using artificial intelligence. This is a more elegant and potentially more effective approach, but it requires different competencies and resources.
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 funded by the foundation will decrease. As Buterin previously announced, he will personally fund some of these initiatives using his own resources. This demonstrates his personal commitment but also underscores the severity of the budget constraints.
Long-Term Vision: "Soft Completion"
Buterin advocates for an approach he calls "soft completion." After the Strawmap roadmap is implemented, the foundation should largely limit itself to security fixes and small, valuable changes. The bar for adding new features to the protocol should be raised significantly. As a benchmark, he suggests looking to Bitcoin rather than "bloated projects with millions of lines of code." This signals a shift towards a more restrained and sustainable model for network development.
Buterin acknowledges 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 thrive in the new reality.
Expert opinion: The 40% budget cut by the EF is not a sign of weakness but a strategic move towards long-term sustainability. Ethereum is transitioning from an era of aggressive growth and experimentation to a phase of maturity and conservative management. The loss of key engineers is a worrying signal, but the bet on formal verification and "soft completion" could be the key to stability for decades to come. The market should view this not as a crisis, but as an evolution.