The Ethereum Foundation (EF) has announced roughly a 40% cut to its annual budget, accompanied by a major structural reorganization. Co-founder Vitalik Buterin said the moves align with the foundation's updated mandate and treasury management strategy — shifting from spending about 15% of remaining assets per year before 2026 to targeting around 5% annual expenditure beyond 2030.
Buterin acknowledged the budget reduction involved difficult choices and real losses for the foundation, highlighting that many departing employees were experienced engineers who have been instrumental in advancing the Ethereum protocol for years.
The foundation will provide severance pay and transition support to affected staff. Severance packages are calculated based on whichever is greater: one month's salary per year worked at the foundation or the legal minimum in the relevant country. Transition support includes limited grants for career counseling and to help employees find new opportunities within the Ethereum ecosystem. Some departing staff may continue contributing to Ethereum through other organizations.
Restructuring into Seven Core Clusters, Focus on Self-Custody and Verifiable Interfaces
As part of the reorganization, the EF is now structured into seven main clusters: Protocol, Access, User, Community, Enterprise, as well as Operations and Management. The new design aims to clarify roles and responsibilities throughout the organization.
The access group will focus on enabling users and software agents to interact directly with Ethereum without intermediaries. Key areas include reading on-chain data, submitting transactions, validation, delegation, and exiting the system. Notably, self-custody and verifiable interfaces will receive strong emphasis, giving users direct control over their assets.
The user group will handle user needs, education, use-case scenarios and impact measurement. The community group manages all communications both within and outside the crypto sector. The enterprise group will work with financial firms, the private sector, governments, universities and non-profits to develop Ethereum-based applications.
A Leaner Ethereum Vision and Immediate Market Reaction
Buterin suggested the streamlined structure could enable more specialization within Ethereum's multi-client model. He also noted that applying AI-driven formal verification to more components could reduce the resources needed for preparing numerous Ethereum Improvement Proposals. Once Strawmap is complete, he said, the foundation will favor a lighter approach prioritizing limited high-impact changes and security fixes.
Following the announcement, Ether's price dropped nearly 4% to $1,661.90, falling below the $1,700 mark amid increased selling pressure. The move coincided with wider market weakness, as investors also reacted to Bitcoin slipping below the $63,000 level and assessed the implications of the EF's restructuring.