Ethereum Foundation under the knife: Buterin confirms 40% budget cut and departure of key personnel
The Ethereum Foundation (EF) is entering a phase of austerity. Co-founder Vitalik Buterin has officially confirmed that the foundation's budget will be cut by approximately 40% this year. This is not just "cost optimization"—it is a deep restructuring that has already led to the loss of valuable personnel and a revision of strategic priorities.
According to Buterin, the goal of such a sharp reduction was embedded in treasury management policy last year. The foundation is systematically transitioning from a model of annual spending to a long-term endowment. Previously, the EF spent about 15% of its remaining reserves per year; now the target is being reduced to 5% annually. Reaching this level is planned only after 2030.
Personnel Losses and Shifting Priorities
Buterin did not hide that the budget cuts have painfully affected the team. He directly described the departing employees as "brilliant people and dedicated engineers," some of whom have worked on the Ethereum protocol for nearly a decade. This is not just a loss of manpower—it is a loss of deep expertise accumulated over years.
Despite the funding cuts, the foundation does not intend to lower its ambitions in developing the protocol itself. The key direction is the Ethereum Strawmap—a large-scale roadmap that should touch all core components of the network: consensus, proofs, privacy, account models, and state management. Essentially, this is the third iteration of Ethereum after The Merge.
One of the most important changes will be the abandonment of the "multiple clients" strategy, which was previously the foundation of network security. Instead of redundancy, the EF is betting on formal verification using artificial intelligence. This is a more efficient but also riskier approach.
What Is Being Scaled Back and What Remains
The Privacy and Scaling Explorations (PSE) division will cease to exist as a separate unit. The Devcon conference will become more modest and less costly. The number of major projects outside of Ethereum supported by the foundation will be reduced. As Buterin previously announced, he will personally fund some initiatives.
In the long term, Vitalik advocates for a concept of "soft completion" of protocol development. After the Strawmap is implemented, the foundation should focus only on security fixes and minor valuable improvements. The bar for adding new features will be significantly raised.
Buterin called for taking inspiration from Bitcoin rather than "cumbersome projects with millions of lines of code." This signals a shift toward a more restrained and conservative model of network development.
My analysis: The 40% budget cut at the EF is not a crisis but a deliberate step toward sustainability. The foundation is preparing for the long game, moving away from the "easy money" of the bull market era. However, the loss of key engineers is a worrying signal. The question is whether the Ethereum community can fill this gap through external developers and grant programs. For now, the bet is on formal verification via AI, which could be either a breakthrough or a bottleneck. Time will tell how effective this "Bitcoin-like" conservative strategy will prove to be.