The nonprofit is eliminating 54 roles as Vitalik Buterin warns that the leaner organization will involve “grand sacrifices,” including changes to client development, Devcon and institutional work.
The Ethereum Foundation is reducing its annual budget by roughly 40% and cutting about 20% of its staff as part of a sweeping restructuring intended to turn the nonprofit into a leaner, endowment-based organization.
The organization said in a blog post Tuesday that 54 employees are leaving following a months-long restructuring process. Its remaining work will be organized around five divisions focused on Ethereum’s protocol, access, users, community and institutional adoption.
Ethereum co-founder Vitalik Buterin said on X the cuts reflect a deliberate shift away from the Foundation’s historically high spending rate rather than a simple attempt to eliminate inefficiencies.
“This year, the EF is decreasing its budget by roughly 40%, which entails some difficult decisions,” Buterin wrote in a post on X.
The reductions implement goals established in the Foundation’s treasury management policy last year. The EF is moving away from spending an average of roughly 15% of its remaining funds annually before 2026 and toward a target spending rate of approximately 5% after 2030.
The shift is intended to transform the Foundation into a long-term-oriented endowment capable of supporting Ethereum through extended market downturns without depending on short-term token sales or favorable market conditions.
But Buterin rejected the idea that the reductions could be achieved without meaningful losses.
He praised the departing employees as dedicated engineers, researchers and contributors, some of whom have worked on Ethereum for nearly a decade, and said he would not characterize them as unproductive workers whose absence could be offset by greater efficiency.
“There was much that is lost,” Buterin said, expressing hope that many would continue contributing elsewhere in the Ethereum ecosystem or in the broader world of censorship resistance, open source, privacy and security — principles the EF abbreviates as CROPS.
More Than Cost-Cutting
The layoffs are part of the implementation of the Foundation’s recently introduced EF Mandate, which seeks to narrow the organization’s priorities around areas that it believes only the EF can credibly lead.
“We must be resourced and organized in a way that allows us to focus on the critical work that only EF can, and therefore must, do in the coming years,” the Foundation said.
The departing workers will receive severance equal to the higher of one month’s salary for every year worked at the Foundation or the minimum required in their jurisdiction. The EF is also offering career-transition assistance and grants covering expenses such as coaching.
The cuts follow a wave of turnover at the organization responsible for supporting development of the world’s largest smart-contract blockchain.
At least eight senior leaders and researchers have left the EF this year, prompting calls for a separate, price-focused Ethereum organization.
Former co-executive director Tomasz Stańczak stepped down in February, while Hsiao-Wei Wang resigned as co-executive director and board member last week after taking a sabbatical. Longtime contributors Josh Stark and Trent Van Epps also announced their departures in April.
Five New Clusters
Under the new structure, the Foundation’s work will be organized around five primary clusters: the protocol layer, access layer, user layer, community layer and institutional layer.
Additional groups will handle operations and directly support the management team.
The protocol cluster will oversee Ethereum’s core technical development, including safely shipping network upgrades, reducing complexity and trusted dependencies, limiting harmful forms of maximal extractable value, and advancing research into post-quantum security, zero-knowledge Ethereum Virtual Machines and privacy at the base layer.
The priorities build on an execution plan published this week by interim executive director Bastian Aue, who committed the Foundation to treating toxic MEV as a structural threat, making privacy a default and paying staff in Ethereum-native assets.
The Foundation stressed that the protocol division is not intended to make Ethereum more marketable or optimize it for short-term commercial goals.
Instead, its mandate is to make Ethereum more difficult to censor, corrupt or capture and more dependable when governments, platforms or financial intermediaries fail users.
Ethereum’s Third Iteration
Despite the reduced budget, Buterin said the Foundation is not scaling back its technical ambitions.
He described the Ethereum “Strawmap” as an effort to replace or substantially improve almost every major component of the protocol, including consensus, proofs, privacy, accounts and state management.
Buterin characterized the roadmap as Ethereum’s third major iteration, following the original proof-of-work network and the proof-of-stake system introduced through the Merge.
Unlike the Merge, however, the transformation is expected to arrive incrementally rather than through a single coordinated upgrade.
At the same time, the Foundation plans to expand its work on Ethereum’s access layer, which covers the interfaces and infrastructure through which users and software agents interact with the network.
“We are not compromising on Ethereum being a Deeply Impressive protocol,” Buterin wrote, arguing that Ethereum should be capable of meeting the challenges posed by quantum computing, artificial intelligence and other major technological shifts.
Some work previously performed within the Foundation will migrate to independent teams in the wider ecosystem. Buterin acknowledged that external contributors will not replace everything lost through the cuts.
Client Model to Shift
One of the most consequential changes will affect Ethereum’s multi-client model.
Ethereum currently relies on several independently developed execution and consensus clients. The model provides redundancy: when a bug affects one minority client, the network can continue operating and finalizing transactions.
Buterin said the EF increasingly expects different clients to focus on specialized needs rather than maintaining multiple near-identical implementations primarily for redundancy.
More components of the protocol may instead depend on AI-assisted formal verification — the mathematical verification of software behavior — as a security strategy.
Smaller Ethereum components, including certain cryptographic libraries, have already used this approach. Buterin said it may eventually allow client teams to implement a large number of Ethereum Improvement Proposals using fewer resources.
The resources saved could then be directed toward specialized client functions and the Foundation’s access-layer priorities.
The strategy could make protocol development more efficient, but it also represents a meaningful change to one of Ethereum’s defining security philosophies. Client diversity has long been presented as protection against catastrophic software failures and the concentration of protocol development in a single implementation.
PSE Is Winding Down
The Foundation’s Privacy and Scaling Explorations unit, known as PSE, will wind down as a standalone group.
PSE has served as an incubator for research and open-source development involving zero-knowledge proofs, privacy, scaling and identity.
Buterin said the change does not necessarily mean fewer people will work on zero-knowledge technology. Instead, researchers and engineers will shift from broad exploration toward implementing ZK-based privacy and scaling directly within Ethereum’s protocol and access layers.
The move reflects the EF’s broader transition from open-ended research toward delivering a more narrowly defined roadmap.
A Smaller Devcon
Devcon, the Ethereum Foundation’s flagship developer conference, is also likely to become smaller, more austere and significantly less expensive to operate.
Buterin said future events will likely run at a much lower deficit and adopt a vision more closely aligned with the Foundation’s mandate.
The EF will also finance fewer large projects outside Ethereum.
Buterin said earlier this year that he planned to fund some public-interest projects personally rather than relying on the Foundation’s treasury. That division is now becoming part of the EF’s formal strategy.
Institutional work will also narrow in scope. Rather than pursuing broad adoption across governments, banks and corporations, the Foundation will focus on producing replicable examples of deployments that strongly preserve censorship resistance, open source, privacy and security.
Those projects may operate at a smaller scale but will be intended to demonstrate how institutions can use Ethereum without abandoning its core principles.
Keeping an Exit Open
The access layer will focus on how people and software agents interact with Ethereum, from reading blockchain data and submitting transactions to delegating authority and exiting applications.
Its guiding principle will be what the Foundation calls the “zero option”: whenever an intermediated path exists, users should also have access to a credible alternative that does not depend on the intermediary.
The cluster will seek to make Ethereum interfaces verifiable, recoverable and understandable, while allowing users to grant agents limited authority that can later be revoked.
The user layer will feed research about real users and organizations into protocol and infrastructure decisions. Its work will include developing user profiles, educational resources, use-case research and methods for evaluating whether Ethereum is meaningfully delivering self-sovereignty.
The Foundation said the group will not turn the EF into a product studio. Instead, it is meant to ensure that technical decisions reflect actual needs and constraints.
The focus on user experience follows an earlier roadmap shift under Stańczak and Wang, when the Foundation narrowed its technical priorities to scaling Ethereum’s Layer 1, increasing blob capacity and improving user experience.
Institutions Without Compromise
The community cluster will shape how the Foundation communicates its mission and builds ties with adjacent movements, including open-source software, privacy advocacy, civil liberties and public-interest technology.
In unusually direct language, the EF said it wants to distinguish itself from “zero-sum financial crypto,” corporate-controlled blockchain projects and nonprofit organizations vulnerable to geopolitical influence.
The institutional cluster will work with banks, insurers, corporations, governments, universities and nonprofits adopting Ethereum and cryptographic technology.
But its reduced mandate will emphasize standards, reference architectures and practical demonstrations that preserve privacy, data portability, verifiable execution and users’ ability to exit an intermediary.
The resulting structure suggests the EF is not rejecting institutional adoption. Rather, it is trying to ensure that adoption does not turn Ethereum into another closed financial network controlled by powerful gatekeepers.
Learning From Bitcoin
In the longer term, Buterin said he favors what he called a “soft lean-and-done” approach to Ethereum development.
Once the Strawmap is completed, Ethereum would largely limit protocol development to security fixes and a smaller number of high-value improvements. New features would face a much higher threshold for inclusion.
The approach is intended to make Ethereum easier to maintain, harder to capture and less dependent on a large permanent development budget.
Buterin said Ethereum should learn less from sprawling software projects containing millions of lines of code and more from Bitcoin, whose base protocol changes slowly and conservatively.
That vision would represent a significant evolution for Ethereum, which has historically differentiated itself from Bitcoin through rapid experimentation and an expansive technical roadmap.
The Foundation is betting that Ethereum can continue evolving aggressively in the near term and then gradually harden into a more stable, self-sustaining protocol.
Funding Scrutiny
The restructuring arrives amid renewed scrutiny of how the EF funds Ethereum’s core development.
Former coordinator Trent Van Epps recently warned of a potential $30 million annual funding gap affecting client teams, researchers and protocol-coordination groups.
The gap stems partly from the expiration of the Client Incentive Program and the EF’s plan to lower its annual spending rate toward an endowment-style model.
The Foundation’s treasury strategy, which The Defiant described as Ethereum “going Defipunk”, prioritizes permissionless, immutable and audited protocols aligned with its cypherpunk values.
The EF has also deployed portions of its treasury into decentralized finance, including an additional $7.5 million of ETH into Morpho in March.
Buterin said the reductions do not fully explain every departure, noting that some changes involve reducing the need for future spending rather than cutting existing teams.
Still, his intervention makes clear that the overhaul entails real tradeoffs.
The EF is attempting to finance an ambitious reinvention of Ethereum while sharply reducing its recurring costs — and accepting that some valuable research, projects and institutional knowledge will be lost in the process.
“The past years have been a challenging era for Ethereum,” Buterin said. “However, the ecosystem is adapting, both inside the EF and outside.”
