The Ethereum Foundation (EF) has announced a major reorganization and unveiled a new governance structure. Co-founder Vitalik Buterin also revealed that the foundation is reducing its budget by approximately 40%, shifting to a long-term capital management model.

https://twitter.com/ethereumfndn/status/2069408300148388113

Ethereum Foundation Restructures

Under the new plan, the foundation will focus on three key areas: developing the core Ethereum protocol, supporting the ecosystem, and enhancing network resilience.

The Ethereum Foundation stated that the new structure aims to improve organizational transparency and expedite the implementation of strategic goals related to the blockchain's further development. It revolves around three areas: Protocol Development, Acceleration of Technology Adoption, and Stewardship for long-term network and community sustainability.

Source: EF blog.

These changes come as the foundation prepares for the next phase of Ethereum's evolution, referred to within the community as Strawmap—a comprehensive upgrade program affecting nearly all components of the network.

Buterin: Foundation Shifts to Cost-Saving Mode

At the same time, Vitalik Buterin disclosed details of the organization’s financial strategy. He indicated that the Ethereum Foundation is gradually moving away from its previous spending model.

While the foundation spent about 15% of its remaining reserves annually until 2026, this figure is expected to drop to 5% after 2030.

“The Ethereum Foundation is transforming into an organization that operates on a long-term capital fund,” Buterin explained.

The 40% budget cut has already led to staffing decisions and the scaling back of certain initiatives.

Focus on AI and Formal Verification

One of the most notable changes will be a revised approach to client security within Ethereum.

Buterin stated that the ecosystem will gradually transition from a model based on redundancy among multiple clients to a more active use of formal verification and AI tools for error detection.

He believes this will reduce the costs associated with maintaining a large number of protocol implementations and accelerate the rollout of updates.

End of the Research Era

The Privacy and Scaling Explorations (PSE) division, which focused on privacy and scaling research, will be downsized.

However, the foundation emphasized that work on zero-knowledge proof technologies will continue. Instead, the focus will shift from experimental research to the implementation of already developed solutions directly into the Ethereum protocol and user infrastructure.

Devcon to Scale Back

Changes will also affect the largest ecosystem conference, Devcon.

According to Buterin, future events will be smaller and less costly for the foundation. Additionally, the Ethereum Foundation plans to reduce the number of major initiatives beyond the development of Ethereum itself.

Some of these projects will be supported by Buterin personally using his own funds.

Post-Strawmap: A Focus on Stability

In the long term, the co-founder of Ethereum advocates for a more conservative approach to network development.

After the completion of the Strawmap program, he suggests focusing primarily on fixing vulnerabilities and making small improvements with high practical value, significantly raising the threshold for introducing new features.

“We should take fewer cues from multi-million line codebases and more from Bitcoin,” Buterin noted.

He believes this approach will help Ethereum remain resilient against centralized influence while also reducing the need for large development budgets.

It is worth noting that in June, a proposal was published at the Ethereum Research forum to redirect up to 10% of staking rewards to fund the ecosystem.