The Ethereum Foundation will cut its 2026 budget by approximately 40 percent and reduce its overall headcount by 20 percent. Vitalik Buterin announced the restructuring, confirming the organization is transitioning to a leaner endowment-style model. Annual treasury spending will drop from 15 percent down to a targeted 5 percent by 2030. The reduction follows months of community scrutiny regarding the foundation’s financial transparency and the slow market performance of Ethereum compared to competing blockchain networks.
The operational changes include officially shutting down the Privacy and Scaling Explorations (PSE) unit and significantly downsizing future Devcon conferences. Buterin is redirecting remaining resources toward specialized client teams focused heavily on AI-assisted formal verification. He noted the foundation was never intended to act as an eternal central command, and having completed its primary launch duties in 2022, it is intentionally shrinking its footprint.
The cuts arrive alongside an ongoing leadership exodus. Co-Executive Director Hsiao-Wei Wang resigned during the restructuring process. Nine senior foundation contributors have departed since January. Following the internal shifts, former EF researcher Dankrad Feist publicly proposed an independent $1 billion organization designed to focus explicitly on improving the market value and price of the asset.
Why It Matters
This organizational reset forces the broader community to fund its own expansion rather than relying on a centralized treasury. Holding just 0.16 percent of the total supply—a sharp contrast to rival chains where foundations often hold up to 50 percent—the foundation is executing its tightest structural adjustment to date.
Buterin pushed back against critics demanding aggressive competition on transaction speeds. He argued that attempting to be only slightly more decentralized than other networks is a route to mediocrity. Going forward, the group will strictly fund “CROPS” properties: censorship resistance, openness, privacy, and security. This leaves the heavy lifting for broader ecosystem growth entirely up to independent developers.