The Ethereum Foundation is cutting its budget by 40% and undergoing a fundamental restructuring: expert analysis
The Ethereum Foundation (EF) is entering an era of austerity and institutional restructuring. The organization has announced fundamental changes to its governance structure, and co-founder Vitalik Buterin confirmed that the foundation's budget is being reduced by approximately 40% with a shift toward a long-term capital management model. This is not merely cosmetic repairs, but a change in the very philosophy of funding blockchain development.
New Three-Component Structure of the EF
According to the presented plan, the foundation's activities will be refocused on three key areas. The first is the development of the core protocol (Protocol). The second is accelerating technology adoption and scaling the ecosystem (Acceleration). The third is ensuring the long-term sustainability of the network and community (Stewardship). This reorganization is expected to increase transparency and decision-making efficiency, especially amid preparations for a major upgrade program known in the community as Strawmap.
Financial Strategy: From Spending to Capital Management
Buterin has revealed details of the new financial discipline. If before 2026 the EF spent about 15% of its reserves annually, after 2030 this figure is planned to be reduced to 5%. According to the co-founder, the foundation is transforming into an organization that lives off long-term capital. The 40% budget cut has already affected personnel decisions and led to the winding down of several initiatives.
AI and Formal Verification Instead of Multiple Clients
One of the most interesting strategic shifts is the reassessment of the approach to security. Instead of maintaining redundancy through multiple client implementations, the ecosystem will move toward actively using formal verification and AI-based tools for bug detection. This will reduce protocol maintenance costs and accelerate the implementation of updates.
Closure of PSE and a New Direction for Devcon
The Privacy and Scaling Explorations (PSE) research unit has been cut. However, work on zero-knowledge proof technologies is not stopping — the focus is shifting from experiments to direct integration of solutions into the protocol. The major Devcon conference will also become more modest and less costly. Buterin stated that he will personally fund some projects that go beyond Ethereum's development.
Course for Stability After Strawmap
In the long term, the Ethereum co-founder advocates for a conservative approach. After the completion of the Strawmap program, he proposes focusing on fixing vulnerabilities and making small improvements with high practical value. "It's worth taking less inspiration from multi-million-line codebases and more from Bitcoin," Buterin noted.
Expert comment: This is a landmark moment for Ethereum. The transition from a "spend to grow" model to a "manage capital and be efficient" model is a sign of maturity. The 40% budget cut and closure of research units may cause concern in the community, but the bet on AI and formal verification looks pragmatic. If the EF can maintain development momentum with fewer resources, it will set a precedent for the entire industry.