Vitalik Buterin has confirmed that the Ethereum Foundation will reduce its overall budget by about 40% this year. In a post on X, he said the move is not a simple efficiency drive but a “real sacrifice.” He framed the cut as part of a funding policy set last year, with the foundation moving toward a longer-term, endowment-based operating model.
Spending policy shifts toward a lower burn rate after 2030
According to Buterin, the Ethereum Foundation had been accustomed to spending roughly 15% of its remaining funds each year. That approach is now being tightened. The long-range target is to keep annual spending near 5% after 2030. He also addressed the recent layoffs and restructuring directly, saying some of the people affected were engineers who had spent close to a decade contributing to Ethereum.
Buterin did not present the changes as routine streamlining. He described them as a difficult trade-off and praised the departing staff for the work they had done across the ecosystem.
PSE exploration work is being wound down and Devcon will be smaller
On the operational side, the foundation is changing how it allocates resources. Buterin wrote that Ethereum had long emphasized the safety benefits of multi-client redundancy, but the focus will move toward more specialization. He also said the foundation plans to use AI-assisted formal verification to reduce development resource needs.
The PSE unit, which has focused on privacy and scaling research, will gradually step away from its earlier exploration mandate and shift to building known pieces of core infrastructure directly. Other cost-cutting steps include reducing the scale of Devcon to lower deficits, trimming support for large projects outside Ethereum’s core, and narrowing institution-facing work to deployments with censorship-resistance properties. Buterin added that he would personally fund some projects.
Strawmap is presented as Ethereum’s third major upgrade path
Even with tighter resources, Buterin said Ethereum’s central goals remain intact. The foundation will focus on a plan called Ethereum Strawmap, which he described as the network’s third-generation upgrade, with the Merge serving as the second. He said the effort is expected to gradually replace or upgrade core protocol components including consensus, proofs, privacy, and the account model, while the foundation also strengthens its strategic role at the access layer.
At the end of the post, Buterin outlined a longer-term direction for Ethereum. Once Strawmap is complete, he said the protocol should stop making frequent large-scale changes and move toward a “soft lean-and-done” model that resembles Bitcoin more closely. Under that approach, upgrades would be limited mainly to security fixes and small high-value improvements, with a very high bar for adding new features.