The Ethereum Foundation is cutting its budget by 40%: Buterin confirms the loss of key personnel
Ethereum co-founder Vitalik Buterin has officially confirmed a major restructuring of the Ethereum Foundation (EF). This year, the foundation is cutting its operational budget by approximately 40%, which inevitably entails a number of difficult personnel decisions. According to Buterin, this policy was laid out last year as part of the treasury management strategy: the foundation is transitioning to a long-term endowment model.
Buterin explained that until 2026, the EF was spending on average about 15% of its remaining funds annually. Now, the target is being reduced to roughly 5% per year, which will be achieved after 2030. The organization aims to maintain resilience to external pressure without the need for large budgets.
What the foundation loses and where resources will go
Contrary to the usual rhetoric, Buterin refused to call the process a simple efficiency improvement. He emphasized that he respects his departing colleagues too much to pretend nothing has been lost. He described the departing employees as "brilliant people and dedicated engineers," some of whom have worked on the Ethereum protocol for nearly a decade.
Despite the cuts, the foundation does not intend to lower its ambitions in protocol development. Buterin identified the 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 "multiple clients" model. Previously, the primary security strategy was redundancy: if an error occurred in one client, the network continued to operate. Now, the foundation is increasingly exploring another approach — 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 eventually become more modest and less costly, and the number of large-scale projects outside Ethereum supported by the foundation will decrease. As Buterin previously announced, he will take on some of these initiatives using his personal funds.
Long-term vision for the protocol
In the long term, Buterin advocates for an approach he called "soft completion." In his assessment, once the Strawmap roadmap is implemented, the foundation should mostly limit itself to security fixes and small, valuable changes.
The bar for adding new features to the protocol should become significantly higher. This approach will allow Ethereum to remain resistant to capture without requiring large budgets. As a benchmark, Buterin suggested looking to Bitcoin as an example, rather than "bloated projects with millions of lines of code." This signaled a shift toward a more restrained model of network development.
Vitalik acknowledged that recent years have been a difficult period for Ethereum. However, in his assessment, the ecosystem is adapting both within the foundation and beyond. Buterin believes the network is well-prepared to develop successfully.
Cryptalist Analysis: The 40% budget cut at the EF is not just financial optimization, but a fundamental shift in management philosophy. The transition to an endowment model and the focus on formal verification with AI signal the maturity of an ecosystem that no longer requires aggressive resource expansion. However, the loss of key engineers who worked on the protocol for nearly a decade is a serious blow to institutional memory. In the short term, this may slow the pace of innovation, but in the long term, it could strengthen the network's resilience, bringing it closer to the ideology of "digital gold."