Ethereum Foundation Cuts Budget by 40% as Vitalik Buterin Pushes Leaner Future

The Ethereum Foundation (EF) will reduce its annual budget by approximately 40% as it transitions toward a more sustainable, endowment-style financial model, according to Ethereum co-founder Vitalik Buterin. The announcement comes amid significant organizational changes, including staff reductions and leadership departures.

The budget cuts are part of a long-term strategy designed to lower the foundation’s spending rate from roughly 15% of its remaining treasury before 2026 to about 5% annually after 2030. Buterin explained that the move is intended to strengthen the foundation’s financial resilience while ensuring continued support for Ethereum’s long-term development goals.

The announcement coincided with the Ethereum Foundation’s confirmation of a 20% workforce reduction. It also follows the resignation of co-Executive Director Hsiao-Wei Wang. Her departure marks the ninth senior-level exit from the organization since January, highlighting a period of substantial restructuring within the foundation.

Buterin acknowledged the challenges associated with the cuts, noting that the organization is losing experienced contributors who have played key roles in Ethereum’s growth over the years. Despite the difficult decisions, he emphasized the importance of aligning resources with the network’s future priorities.

To preserve funding for Ethereum’s ambitious development roadmap, the foundation plans to reduce spending in several areas. Proposed changes include winding down the Privacy and Scaling Explorations (PSE) unit, organizing smaller and more cost-effective Devcon conferences, narrowing institutional initiatives, and focusing on specialized client teams supported by AI-assisted formal verification technologies.

Buterin described Ethereum’s current roadmap as the protocol’s “third iteration” following the successful Merge upgrade. He reiterated his vision for a future where Ethereum operates with a leaner development structure, focusing primarily on security improvements and a limited number of high-impact upgrades rather than continuous feature expansion.

The Ethereum Foundation’s restructuring comes at a critical time as Ethereum faces increasing competition from rival blockchain networks. The changes reflect a broader effort to strengthen the organization’s financial position, improve operational efficiency, and redefine its role within the growing Ethereum ecosystem.