The Ethereum Foundation is radically changing course: a 40% budget cut and a new era of governance
The Ethereum Foundation (EF) is entering a new phase of its existence. The organization has announced a deep reorganization that will affect not only its governance structure but also its financial model. Vitalik Buterin confirmed that the foundation is cutting operational expenses by approximately 40%, transitioning to a long-term capital management strategy. This is undoubtedly a signal of the ecosystem's maturation: from aggressive growth to sustainable development.
New Three-Tier Structure of the EF
The foundation's activities will be restructured around three key areas. The first is Protocol, focusing on the development of the Ethereum base protocol. The second is Acceleration, aimed at speeding up technology adoption and ecosystem growth. The third is Stewardship, ensuring the long-term sustainability of the network and community. According to the leadership, this structure will increase transparency and accelerate the implementation of strategic tasks, especially ahead of the large-scale Strawmap upgrade program, which will affect nearly all components of the network.
Financial Austerity and a Bet on AI
Buterin revealed details of the new financial strategy. While until 2026 the EF spent about 15% of its reserves annually, after 2030 this figure is planned to be reduced to 5%. The foundation is transforming into an organization living off long-term capital. The 40% budget cut has already led to personnel changes and the winding down of several initiatives.
One of the boldest steps will be a revision of the approach to client security. Instead of maintaining redundancy across multiple clients, the ecosystem will more actively use formal verification and artificial intelligence-based tools for bug detection. According to Buterin, this will reduce costs and speed up the implementation of updates.
Closure of PSE and a New Format for Devcon
The Privacy and Scaling Explorations (PSE) division, which focused on privacy and scaling research, has been cut. However, work on zero-knowledge proof (ZKP) technologies is not stopping—the emphasis is shifting from experiments to implementing ready-made solutions directly into the protocol.
The ecosystem's largest conference, Devcon, will also become more modest and less costly for the foundation. Buterin intends to personally support some projects that fall outside the scope of Ethereum's development.
A Course for Stability After Strawmap
In the long term, the co-founder of Ethereum advocates for a conservative approach. After the completion of the Strawmap program, he proposes focusing on fixing vulnerabilities and making small but practically valuable improvements, significantly raising the bar for introducing new features. "It's worth taking less inspiration from multi-million-line codebases and more from Bitcoin," Buterin noted.
Analyst's opinion: This decision looks like a pragmatic step for a mature project. The transition from a "spend everything on growth" model to a "manage capital" model is a natural stage for a blockchain aiming for long-term sustainability. However, success will depend on how effectively the EF can balance conservative management with the need to support innovation in order not to fall behind competitors.