The Ethereum Foundation enters an era of austerity: a 40% budget cut and a shift in strategy
The Ethereum Foundation (EF) is officially transitioning into a strict financial discipline regime. The approximately 40% reduction in the annual budget is not just a number, but a signal of a deep structural reorganization of an organization that has set the tone for the development of the entire ecosystem for decades. As an analyst, I see this step not as panic, but as long-term pragmatism, although the price of such a decision is the loss of key personnel.
Vitalik Buterin confirmed that the target model for treasury spending is changing radically. While the foundation previously spent about 15% of its remaining funds annually, the bar is now being lowered to 5% per year, a level that will only be reached after 2030. In effect, the EF is shifting from a model of an "active investor in development" to an "endowment" model — a fund designed to exist indefinitely, without requiring external infusions or succumbing to market pressure.
Buterin was candid: staff reductions are a painful process. He described the departing employees as "brilliant people and dedicated engineers," some of whom have worked on the protocol for nearly a decade. This is not "optimization" — it is a loss of expertise. However, according to the Ethereum founder, the foundation is not lowering its ambitions.
Where Resources Will Go: Strawmap and the New Architecture
Funds will be redistributed in favor of a key project — the Ethereum Strawmap. This is a massive roadmap that Buterin calls "the third iteration of Ethereum after the merge." It touches on consensus, proofs, privacy, the account model, and state management of the network. This is not just an upgrade, but a fundamental restructuring of the protocol.
One of the most interesting changes is the shift away from the "client redundancy" strategy in favor of formal verification using AI. Previously, security was built on the premise that an error in one client would not paralyze the network. Now, the foundation is betting on mathematically proven code correctness. This is a more complex, but also more reliable path.
Simultaneously, individual divisions are being wound down: Privacy and Scaling Explorations (PSE) will cease to exist as an independent unit, Devcon will become more modest, and the number of large-scale projects outside of Ethereum will be reduced. As Buterin has already announced, he is funding some initiatives from his personal funds.
"Soft Completion" Instead of Infinite Growth
Buterin proposes a new philosophy — "soft completion." After the Strawmap is implemented, the foundation should focus only on security fixes and minor, valuable changes. The bar for adding new features to the protocol will be significantly raised. As a benchmark, he suggests looking to Bitcoin for inspiration, rather than "bloated projects with millions of lines of code." This signals a shift from extensive growth to stability and resilience.
Cryptalist Commentary: The Ethereum Foundation's decision is a sign of maturity. The market no longer tolerates wastefulness. However, losing experienced engineers at a time when the network is preparing for such a massive restructuring is a serious risk. The success of Strawmap will depend not only on funding but also on whether the foundation can retain its remaining talent and attract new ones willing to work under strict austerity measures.