Vitalik details Ethereum reset as Foundation cuts budget 40%

Ethereum cofounder Vitalik Buterin said the Ethereum Foundation is reducing its budget by roughly 40% as it moves toward a smaller and more sustainable operating model.

This year, the EF is decreasing its budget by roughly 40%, which entails some difficult decisions. The goal of the decreases was set out in the Treasury Management Policy last year: the EF is transitioning into being a long-term-oriented endowment-based organization, shifting…

— vitalik.eth (@VitalikButerin) June 23, 2026

Buterin said the cuts are part of a longer term transition from spending about 15% of the foundation’s remaining funds each year toward an annual spending rate of roughly 5% after 2030.

He rejected the idea that the reduction was simply an efficiency exercise or that the people affected were unproductive.

Buterin said the foundation was losing talented engineers, including developers who had worked on the Ethereum protocol for nearly a decade, and acknowledged that the remaining organization would not fully replace everything being cut.

Buterin said the smaller budget would require several major changes to how Ethereum development and ecosystem work are organized.

Ethereum’s multiple client strategy will increasingly prioritize specialization instead of maintaining several clients mainly for redundancy.

Buterin said AI assisted formal verification could eventually reduce the resources required to develop, test and implement large numbers of protocol changes.

Under that model, different client teams could focus more heavily on specific user needs while formal verification provides additional assurance that protocol software behaves correctly.

The foundation is also winding down Privacy and Scaling Explorations as a standalone unit.

Buterin said zero knowledge research would continue, but with more emphasis on implementing privacy and scaling technology directly into Ethereum’s protocol and access layers rather than broader experimentation.

Devcon is also expected to become smaller, more basic and significantly less expensive than previous editions.

The foundation will reduce the number of large projects it funds outside Ethereum, with Buterin saying he plans to support some projects he considers important using his personal funds.

Its institutional work will also narrow, focusing on smaller and repeatable examples of Ethereum deployments that preserve censorship resistance, openness, privacy and security.

Despite the reductions, Buterin said the foundation is not lowering its ambitions for Ethereum’s core protocol.

He described the Ethereum Strawmap as a major overhaul covering consensus, proofs, privacy, accounts, state management and other parts of the network.

Buterin compared the roadmap to a third version of Ethereum following the Merge, though he said the changes would arrive gradually rather than through a single major upgrade.

Over the longer term, Buterin said he supports a “soft lean and done” model once the Strawmap is completed.

Under that approach, Ethereum development would focus mainly on security fixes and a smaller number of high value improvements, with a much higher threshold for adding new protocol features.

Buterin said the goal is to keep Ethereum resistant to capture without requiring permanently large development budgets, drawing more inspiration from Bitcoin and less from increasingly complex software projects.