Ethereum co-founder Vitalik Buterin states EF budget cut by about 40% this year
The Ethereum Foundation (EF) announced a budget cut of approximately 40% this year as part of its transition plan from a spending organization to a long-term donation fund model, aiming to gradually reduce annual spending from about 15% to around 5% after 2030.
This restructuring has resulted in a reduction of about 54 employees, accounting for approximately 20% of the overall team. Vitalik stated that many departing members may continue to participate in ecosystem development in external capacities. The foundation is shifting its strategy towards a more lightweight protocol governance and development approach, including advancing the Strawmap roadmap and focusing on core upgrades such as consensus, privacy, and account models.
In terms of market mechanisms, under the backdrop of improved financial sustainability for the foundation, Ethereum ecosystem funds are shifting from large internal projects to external innovations and protocol security, benefiting protocol developers and external contributors. While internal resources of EF are under pressure, its long-term anti-censorship positioning is strengthened, attracting long-term holders and institutional investors to flow funds into ETH-related assets.
Source: Public information
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Vitalik Buterin has previously advocated for Ethereum governance and financial reforms, such as the Danksharding roadmap iterations. This EF transformation continues his philosophy of evolving from foundation-led to ecosystem-driven development, similar to the decentralized model exploration by Bitcoin core developers.
In terms of capital pathways, EF retains its core treasury through a donation fund model while reducing expenditures, shifting resources towards high-value protocol improvements and external teams. The motivation is to ensure long-term sustainability rather than short-term consumption, strategically encouraging more innovation to be borne by the ecosystem and reducing centralization risks.
Similar to how the foundation's role weakened after multiple protocol upgrades in Ethereum's early days, and other public chain foundations transitioned to lightweight governance, this event places EF in a phase of transitioning from expansion to streamlining, with core figures like Vitalik guiding the roadmap.
Essentially, this represents a change in capital concentration and governance structure, with the foundation shifting from heavy intervention to guarding the core of the protocol. The mechanism involves a sustainable treasury model and AI-assisted development reducing reliance on human resources, prompting capital to concentrate towards decentralized external contributors and high-value areas like Layer 2, reinforcing Ethereum's pricing power as a long-term stable infrastructure.
ABAB News · Cognitive Law
Expenditures can be exhausted, donations can be sustainable; as the foundation trims down, the ecosystem becomes the new engine of capital.
Internal layoffs are not a recession but a restructuring; a 20% personnel outflow in exchange for long-term 5% expenditure stability.
Centralization builds walls quickly, decentralization protects cities for the long term; lightweight protocols and externalized innovations are the keys to sustainable structures.