The Ethereum Foundation (EF) is undergoing a significant transformation, marked by the dissolution of its protocol support team and the departure of at least eight senior staff members this year, including co-executive director Xiao Wei Wang. These changes come as independent non-profit organizations like ETHLabs and Ethereum Institutional emerge to take over key functions, signaling a potential shift in the foundation's role within the ecosystem.
Exodus of Talent and Organizational Shake-up
The protocol support team, responsible for coordinating core developer meetings and tracking network upgrades, was officially disbanded yesterday. This move is part of a broader restructuring that saw 54 employees—20% of EF's workforce—laid off in June, as outlined in the "New EF Architecture" announcement. The foundation described the cuts as necessary to "obtain the structure, activities, and personnel required for critical tasks," a stark departure from its traditionally academic and research-oriented image. The departures include high-profile figures like Wang, who was seen as a key reformer.
Rise of Independent Entities
On the same day EF announced its new structure, ETHLabs was launched by five former EF researchers. This non-profit research lab aims to make Ethereum the settlement layer for the global economy, backed by investors including Consensys founder Joe Lubin and crypto fund SNZ. A week later, Ethereum Institutional debuted, founded by ex-EF members David Walsh, Marius Smith, and Matthew Dawson. It focuses on institutional adoption of Ethereum, offering free consulting to banks and asset managers, and collaborates with ETHLabs and other groups. These organizations are effectively absorbing functions that EF previously held, from research to institutional outreach.
AI Testing and Future Challenges
EF's security team has begun using AI agents to test Ethereum software, uncovering vulnerabilities like a remote panic issue in the libp2p gossipsub protocol (CVE-2026-34219). The agents are organized into specialized roles for reconnaissance and verification, but the foundation insists AI is not replacing human researchers—only changing their workflow. However, as AI models advance, further staff reductions are possible, adding pressure on EF to redefine its purpose.
A Diminishing Role?
Ethereum founder Vitalik Buterin has shifted his stance, stating in May that "EF should not be the center of the ETH ecosystem" and advocating a "small and long-termist" approach. With ETH struggling to break $5,000 for five years and lacking a clear value narrative, as noted by former EF researcher Ansgar Dietrichs, the foundation's ability to lead ecosystem growth is in question. Observers suggest EF may eventually become a symbolic "mascot" while entities like ETHLabs and Ethereum Institutional drive adoption and innovation.