The Ethereum Foundation tightens its belt: budget cut by 40%, team jumps ship
The Ethereum Foundation (EF) is entering an era of austerity. Co-founder Vitalik Buterin confirmed that the foundation's expenses will be reduced by approximately 40% this year. This is not just "optimization"—it is a deep restructuring that has already led to the loss of key personnel. Buterin openly acknowledged that the departing employees are "brilliant minds and dedicated engineers," some of whom have worked on the protocol for nearly a decade. Calling this "efficiency improvement" would be disrespectful to their contributions, he emphasized.
The budget cut is not a spontaneous decision but part of a long-term treasury management strategy. Previously, the EF spent about 15% of its remaining funds annually. Now, the foundation aims to reduce this figure to 5% per year, to be achieved after 2030. This means a transition to a long-term endowment model, where the organization seeks to be resilient to external pressure without relying on large budgets. Essentially, the EF is preparing for a "cold war" in the crypto industry, where the most frugal, not the richest, survive.
Where resources are going and what is changing
The cuts will not only affect salaries. The Privacy and Scaling Explorations (PSE) division is being wound down as a separate unit. The Devcon conference will become more modest and less costly. The number of large-scale projects outside of Ethereum funded by the foundation will also decrease. As Buterin previously announced, he is taking on the personal funding of some initiatives.
However, this does not mean that protocol development is stopping. On the contrary, Buterin is betting on the Ethereum Strawmap—a massive roadmap that, he says, will become the third iteration of Ethereum after The Merge. It covers consensus, proofs, privacy, account models, and state management. The key change is a shift from a "multi-client" strategy to formal verification using artificial intelligence. Previously, security was ensured through redundancy: if one client failed, the network continued operating. Now, the EF is betting on proving code correctness.
Long-term vision: "soft completion"
In the long term, Buterin advocates for an approach he calls "soft completion." After the Strawmap is implemented, the foundation should largely limit itself to security fixes and minor valuable changes. The bar for adding new features to the protocol should become significantly higher. As a benchmark, he suggests looking to Bitcoin rather than "bloated projects with millions of lines of code."
My analysis: This decision is a sign of Ethereum's maturation. The foundation is transitioning from aggressive growth funding to a "mature network" mode, where stability and security are valued more than the speed of innovation. The loss of talented engineers is a painful but perhaps inevitable stage. The question is whether the ecosystem can compensate for this outflow through decentralized teams and communities, or whether we will see a slowdown in development that opens the door for competitors.