The Ethereum Foundation is cutting its budget by 40%: Vitalik Buterin on the "bitter necessity" and new strategy
Ethereum co-founder Vitalik Buterin confirmed that the Ethereum Foundation (EF) is cutting its budget by approximately 40% this year. According to him, this decision was embedded in the treasury management policy last year, and the foundation is now transitioning to a long-term endowment model.
Buterin explained that until 2026, the EF spent on average about 15% of its remaining funds annually. Now, the target is being reduced to roughly 5% per year, which will be achieved after 2030. The organization aims to remain resilient to external pressure without requiring large budgets. He emphasizes that this is not just about "increasing efficiency," but a painful yet necessary process.
What is the foundation losing, and where will resources go?
Buterin does not hide that the departing employees are "brilliant people and dedicated engineers," many of whom have worked on the Ethereum protocol for nearly a decade. He respects his colleagues too much to pretend that nothing has been lost. However, the cuts do not mean a reduction in ambitions for protocol development. The key focus becomes the Ethereum Strawmap — a massive roadmap that essentially represents the third iteration of Ethereum after The Merge. It will cover consensus, proofs, privacy, account models, and the state of the network.
One of the main changes will be a shift from the "multiple clients" strategy — redundancy as a foundation of security — to formal verification using artificial intelligence. The Privacy and Scaling Explorations (PSE) unit is being dissolved as a separate entity, the Devcon conference will become more modest and less costly, and the number of large-scale projects outside of Ethereum from the foundation will decrease. Buterin previously announced that he is taking on some of these initiatives with his personal funds.
Long-term vision: "soft completion" and the Bitcoin example
In the long term, Buterin advocates for an approach he calls "soft completion." After the Strawmap roadmap 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 be significantly higher, allowing Ethereum to remain resistant to capture without requiring large budgets.
He suggested taking Bitcoin as a benchmark, rather than "cumbersome projects with millions of lines of code." This signals a shift toward a more restrained model of network development. Recent years have been a challenging period for Ethereum, but according to Buterin's assessment, the ecosystem is adapting both within the foundation and beyond. The network is well-prepared to continue developing successfully.
Cryptalist Analysis: The 40% budget cut by the EF is not just financial optimization, but a fundamental shift in management philosophy. The transition to a "soft completion" model and the focus on Bitcoin as a benchmark for a mature network signals that Ethereum is entering a phase of conservative development, where stability and security are prioritized over the speed of innovation. This may slow the pace of updates but strengthen the trust of institutional investors who value predictability.