Ethereum Foundation announced that it will reduce its annual budget by approximately 40% this year. The agency also confirmed the departure of 54 employees, or around 20% of the total staff, as part of the wider restructuring. The development was announced as part of the foundation’s plan to move towards a long-term endowment funding model.
Budget policy and staff separations
Vitalik Buterin, one of the co-founders of Ethereum, stated that the changes were implemented in line with the foundation’s authority framework and treasury management policy. Accordingly, the Ethereum Foundation plans to move away from the approach of spending approximately 15% of remaining assets per year before 2026 and adopt an annual spending target of approximately 5% after 2030. Ethereum Foundation stands out as one of the main non-profit institutions supporting the development of the Ethereum ecosystem.
While Vitalik Buterin stated that the budget cut involved difficult decisions and that this process caused real losses for the institution, he stated that a significant portion of the employees who left were experienced engineers who had contributed to the development of the Ethereum protocol over the years.
The Foundation stated that severance pay and transition support will be provided to staff who leave their jobs. Accordingly, the payment package will be calculated according to the higher of one month’s salary for each year the employee spends in the foundation and the legal obligation in the relevant country.
It was announced that transition support includes help finding new roles within the Ethereum ecosystem and a limited grant to cover expenses such as career counseling. The Foundation also noted that some departed employees may continue to contribute to Ethereum through different institutions.
The new structure was divided into seven main clusters
As part of the restructuring, the Ethereum Foundation divided its work into seven main clusters. These consist of protocol layer, access layer, user layer, community layer, enterprise layer and operation and management clusters. According to the foundation, this structure aims to make the distribution of duties clearer.
The access layer will focus on how users and software agents interact with Ethereum without the need for intermediary structures. In this area, topics such as reading chain data, sending transactions, verification, delegation of authority and exiting the system will be discussed. The emphasis will be on verifiable interfaces and keeping assets under direct user control.
Mini dictionary: Self custody means that digital assets are controlled directly by the user rather than by an exchange or custodian. Formal verification, on the other hand, is a technical verification approach that aims to test that a software or protocol complies with certain rules using mathematical methods.
It was stated that the user layer will focus on user needs, training, usage scenarios and impact measurement. The community layer will handle the foundation’s communication within and outside the crypto industry. The enterprise layer will work with financial companies, the private sector, governments, universities and non-profit organizations on Ethereum-based applications.
Leaner Ethereum plan and market impact
Buterin stated that as part of the leaner structure, Ethereum’s multi-client model could move from a repetitive structure to more specialization. He also said that utilizing AI-supported formal verification methods in more components of Ethereum could reduce the resources required to prepare large numbers of Ethereum Improvement Proposals.
Buterin stated that once Strawmap is completed, he prefers a lighter approach focusing on security fixes and limited high-value changes.
Following the statements, the Ether price fell by 3.97% to $1,661.90 due to the selling pressure and fell below the $1,700 threshold. The move in the market comes as investors consider both the restructuring in the foundation and the general market weakness that has strengthened after Bitcoin fell below the $63,000 level.
