On June 23, the Ethereum Foundation (EF) announced a new round of organizational restructuring, stating that 54 colleagues would be reduced, accounting for about 20% of the team. On the same day, Ethereum co-founder Vitalik Buterin explained the budget cut in a lengthy post on X platform and acknowledged that this adjustment is not something that can be simply packaged as an efficiency enhancement, as outstanding talent, long-term projects, and organizational memory will all be affected. For investors, EF is not a typical company; it has long relied on the ETH treasury to support protocol development, ecosystem public goods, and developer activities. The budget contraction will impact Ethereum's development pace, ecosystem division of labor, and treasury sustainability in the coming years.
Official Confirmation of 20% Workforce Reduction and 40% Budget Cut
According to EF's official blog on June 23, the Foundation will reorganize around clusters such as protocol layer, access layer, user layer, community layer, and institution layer, and reduce 54 colleagues, accounting for approximately 20% of the EF team. The official explanation is that this adjustment is to implement this year's released Mandate and last year's Treasury Management Policy, making the organizational structure closer to the direction that Ethereum currently needs most.
Vitalik provided a more direct budgetary perspective in the X forum post. As reported by multiple crypto media outlets, he mentioned that the EF's budget will be cut by around 40% and emphasized that this is not simply removing "dead weight," and not everyone leaving can be classified as inefficient. Many have been involved in protocol development for nearly a decade, have written code and documentation, and have also worked in community coordination, making long-term contributions to the Ethereum ecosystem.
This statement distinguishes this round of adjustments from a standard layoff narrative. EF is not announcing a "spend less but everything remains unaffected" scenario but rather acknowledging that long-term sustainability comes at a cost. More accurately, while the proportion of workforce reduction has been publicly disclosed, the absolute amount of the budget cut, details of the affected teams, and certain project adjustments have not been fully revealed.
The institutional background for this budget contraction can be traced back to the "Treasury Management Policy" released by EF in June 2025. The policy outlined that the annual operational spending target at the time was about 15% of the treasury size and planned to linearly decrease to a long-term target of around 5% over approximately 5 years, while retaining some flexibility.
In other words, the EF is attempting to transition from a high-expenditure operational organization to a long-term model more akin to a university endowment fund. The goal of this shift is to prevent a mismatch between the ETH treasury's volatility and the long-term development needs, ensuring that Ethereum will continue to have the resources to support its core protocol and public goods for decades to come.
PSE, Devcon, and Security Redundancy Are All Contracting
The sacrifices outlined by Vitalik are not merely abstract austerity measures.
The first type of change occurs in Ethereum's historically emphasized multi-client model. In the past, one of the key reasons for the multi-client setup was security redundancy. If a client had a bug, as long as its share was below a certain threshold, it wouldn't compromise the network's liveness. With budget and manpower reductions, the EF will move towards more specialization and explore AI-assisted formal verification to enhance code reliability.
It should not be understood here that AI has replaced client redundancy. Formal verification fundamentally involves using mathematics and tools to check if the code behaves as expected. AI can assist in some processes, but whether it can be scaled across more protocol components is still under exploration. For a foundational network like Ethereum that carries significant assets and applications, whether this shift can deliver on its promises is one of the subsequent risks.
The second type of change relates to the PSE team. PSE, which stands for Privacy and Scaling Explorations, is an EF internal team that has long focused on privacy and scalability research. According to Vitalik's lengthy post and media reports, the PSE team as an independent unit will gradually wrap up, and related ZK, privacy, and scaling work will shift more towards practical implementation at the protocol and application layers.
This does not mean that privacy or zero-knowledge proof work will cease but rather that the research-oriented, exploratory organizational form is contracting, with resources being more concentrated towards directions that can be integrated into protocols or user tools.
The third type of change involves events and extraneous projects. Large-scale developer conferences like Devcon will reduce in size, become more cost-effective, and reduce deficits. The EF will also decrease large projects beyond the Ethereum core. Some projects that Vitalik personally deems important but are not suitable for EF support may be backed by his personal funds instead.
Institutional partnerships will also become more focused. The EF's official blog mentions that institutional focus will be on public goods, enterprise adoption, government relations, and regulation, but the foundation as a whole will emphasize deployable use cases that are scalable, small-scale, and align with the values, rather than taking on broad industry collaborations.
The Strawmap Remains at the Core but It Was Never Meant to Be Final
On the other side of budget contraction is EF's continued focus on allocating limited resources to the most core activities.
In a lengthy post, Vitalik emphasized that Ethereum will not abandon the Strawmap. The Strawmap can be understood as an L1 protocol roadmap draft proposed by EF Protocol and maintained by EF Architecture, covering various aspects such as consensus, proof systems, privacy, account model, state, and more.
The Strawmap website also provides a caveat: it is still a "work in progress draft" based on rough ecosystem consensus and may evolve over time. This is crucial. It is not a frozen formal upgrade list but more like a set of directions for Ethereum to continue transforming L1 post-Merge.
EF does not intend to regress to merely maintaining the status quo due to budget cuts. The foundation is narrowing its organizational scope, focusing not on doing everything but on concentrating on the base layer protocol and user access layer.
The so-called access layer refers to the tools and experiences that users actually interact with Ethereum. In the new structure, EF defines it as helping users to interact with Ethereum's infrastructure securely and privately without relying on unverifiable intermediaries. It differs from widespread expansion in commercial applications and is closer to public infrastructure construction.
In the Mandate released by the EF Board in March 2026, CROPS was listed as a non-negotiable baseline: censorship resistance, open source, privacy, and security. This framework explains why the foundation will forgo some projects that may seem influential but are not closely aligned with core values and the core protocol.
EF's contraction is not a complete withdrawal but a redefinition: what must be undertaken by the foundation, what can be delegated to a broader ecosystem, and what is no longer suitable for EF to support through the treasury.
Filling the Gaps After Adjustments: Can the Ecosystem Step Up?
This adjustment is not easily interpreted as bullish or bearish.
In the long run, reducing spending pace helps EF extend the treasury's lifespan, reduces the selling pressure of ETH due to expenditure needs, and positions the foundation more as a long-term public good funder. For a blockchain network that has been running for over a decade, this restraint makes practical sense.
The short-term costs are equally clear. After excellent engineers depart, knowledge transfer, code maintenance, community coordination, and security reviews may all be affected. EF has previously shouldered a significant amount of "work that nobody directly pays for but someone must do," and once the foundation steps back, there is no automatic answer as to whether the external ecosystem can promptly fill the gaps.
The Strawmap itself is not a one-time upgrade. It is more like a long-term, incremental protocol overhaul rather than a version released on a single day. After the budget reduction, whether the roadmap can maintain its pace of advancement depends on EF's internal priorities, external developer uptake capacity, and the safety of each upgrade step.
Vitalik also mentioned a longer-term preference: after the completion of Strawmap, Ethereum could move towards a more "concise completion" state, significantly raising the bar for adding new protocol features, leaning more towards Bitcoin-like restraint, rather than becoming a bloated project with millions of lines of code. However, this is closer to a personal vision and cannot be directly translated into the formal roadmap approved by the EF.
The signal released by this long post is not that Ethereum development is going to halt, but that the EF is beginning to trade real pruning for long-term sustainability, pushing resources towards core protocol and layer-one issues. The real test lies in whether the pruned redundancies, projects, and manpower can be picked up by the ecosystem, tools, and new processes; and whether this more ambitious path laid out in Strawmap can continue to advance within a leaner organization.
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