Vitalik Buterin has confirmed the Ethereum Foundation will reduce its annual budget by roughly 40% this year as the organization shifts toward a long-term endowment model, while the foundation confirmed that 54 employees, or about 20% of its staff, are leaving as part of a wider restructuring.
The changes were announced as the Ethereum Foundation implements its Mandate and Treasury Management Policy. Buterin said the foundation is moving away from its pre-2026 pattern of spending about 15% of remaining funds each year and toward a post-2030 target of about 5% per year.
After the announcement, the Ethereum price dipped further, falling by 3.97% to $1,661.90 as selling pressure pushed the token below the $1,700 level. The price move came as the market assessed the foundation’s restructuring and broader crypto market weakness after BTC fell below the $63,000 level.
Ethereum Foundation Moves Toward Endowment Model
Buterin said the budget reduction involves difficult decisions and acknowledged that the process carries real losses for the organization. He said many departing Ethereum Foundation employees are experienced engineers and contributors who helped develop Ethereum’s protocol over several years.
The foundation said affected employees will receive severance and transition support. The severance package will be the higher of one month’s pay per year worked at the foundation or the amount required by the person’s local jurisdiction.
The transition support includes help finding new roles across the Ethereum ecosystem, along with a small grant intended to cover costs such as career coaching and other transition expenses. The foundation said it expects some departing staff to continue contributing to Ethereum from other organizations.
Buterin said part of the work previously handled inside the foundation may move to the broader Ethereum ecosystem. However, he also said the shift will not fully replace everything lost through the budget reduction.
New Structure Separates Ethereum Work Into Clusters
The Ethereum Foundation said its new structure is built around five main work clusters: protocol layer, access layer, user layer, community layer, and institutional layer. It also includes an operations cluster and a management cluster.
The protocol layer will focus on core Ethereum development, including scalability, censorship resistance, privacy, security, open-source guarantees, and future protocol changes. The foundation said this work includes safe hard fork delivery, lower complexity, fewer trusted dependencies, MEV-related defenses, zkEVM development, L1 privacy, and post-quantum security research.
The access layer will focus on how users and agents interact with Ethereum without relying on intermediaries. Its work covers reading chain data, transacting, proving, delegating, and exiting, with an emphasis on verifiable interfaces and self-custody.
The user layer will study user needs, education, use cases, and impact measurement. The community layer will manage how the foundation communicates inside and outside crypto, while the institutional layer will work with financial firms, companies, governments, universities, and nonprofit groups on Ethereum-related deployments.
Buterin Outlines Strawmap and Leaner Ethereum Plan
Buterin said the Ethereum Strawmap remains a major technical undertaking that aims to replace or improve several parts of the protocol, including consensus, proofs, privacy, the account model, and state. He described it as a third phase of Ethereum development after the Merge, although he said it will ship piece by piece rather than through one major event.
As part of the leaner structure, Buterin said Ethereum’s multi-client model may shift from redundancy toward more specialization. He said more parts of Ethereum could rely on AI-assisted formal verification, which may reduce the resources needed to ship large numbers of Ethereum Improvement Proposals.
He also said Privacy and Scaling Explorations is winding down as a unit, with more zero-knowledge work moving from exploration toward direct implementation in the protocol and access layer. Devcon may also become smaller and lower cost over time, while fewer beyond-Ethereum megaprojects will be funded by the foundation.
Buterin said he favors a “soft lean-and-done” approach after the Strawmap is completed, with Ethereum focusing mainly on security fixes and small high-value changes.
