The Ethereum Foundation is slashing its budget by roughly 40% and cutting about 20% of its staff, part of a planned transition to a leaner, endowment-style organization. Co-founder Vitalik Buterin described the cuts as a deliberate trade-off, not an efficiency drive, while Solana co-founder Anatoly Yakovenko argued the leaner foundation will move faster and prove bullish for Ethereum.
What the Budget Cuts Entail
The foundation confirmed it is eliminating 54 roles, close to one-fifth of its staff, and reorganizing into a seven-cluster structure focused on protocol security, censorship resistance, and privacy. Buterin outlined concrete losses, including a smaller Devcon conference, the wind-down of the Privacy and Scaling Explorations team, and fewer projects beyond Ethereum's core. He also signaled his diminishing influence on the board.
The foundation's June 2025 treasury policy sets annual spending at 15% of holdings, with a 2.5-year cash buffer, and maps a glide path to a 5% endowment baseline by around 2030. To sell less ether (ETH), it now relies on staking and DeFi yield instead of principal. Buterin tied the budget to Ethereum's Strawmap, which he calls the network's third iteration after the Merge, and wants that core protocol overhaul finished before adding new features. He expects leaner shipping and more use of AI-assisted formal verification to reduce upgrade costs.
Solana Co-Founder Sees Upside
Not everyone views the cuts as negative. Solana co-founder Anatoly Yakovenko argued that tight budgets force focus: "Bullish… Budget constraints force prioritization and focus. Ethereum isn’t going away. A smaller and leaner EF will be more decisive and will move faster and will be able to course correct faster." Skeptics see risk, with former foundation contributor Trent Van Epps warning of a roughly $30 million annual funding gap for core development. BitMine chairman Tom Lee dismissed the crisis talk, betting private backers and stakers will step in.
That bet is already taking shape. Days earlier, five former foundation researchers launched an independent nonprofit, Ethlabs, backed by Lee and Ethereum co-founder Joe Lubin to push institutional adoption. Ether's price reflected the unease, sliding below $1,660, down about 5% over 24 hours, though it retained its rank as the second-largest cryptocurrency at about $200 billion. The next treasury reports and protocol milestones will test whether a smaller foundation ships faster, as Yakovenko predicts, or whether lost talent slows Ethereum's most ambitious upgrade yet.