REALITY CHECK | Ethereum Foundation to Cut Budget by 40% as Founder Pushes for a Leaner Structure

The Ethereum Foundation will reduce its annual budget by about 40% in 2026 as part of a sweeping restructuring aimed at making the organization leaner and less reliant on spending from its treasury, Ethereum Co-Founder, Vitalik Buterin, said this week.

The budget reduction comes alongside a workforce cut affecting roughly 20% of the foundation’s staff, or 54 employees, marking one of the biggest organizational overhauls in the nonprofit’s history. The foundation said the changes are intended to streamline operations, sharpen execution, and focus resources on Ethereum’s next phase of development.

According to Buterin, the foundation is moving toward an endowment-style model that lowers annual spending relative to its treasury reflecting a broader effort to improve long-term sustainability as Ethereum faces increasing competition from rival blockchain networks.

The restructuring follows months of leadership turnover and internal debate over the foundation’s role in the ecosystem.

The remaining organization is expected to be organized around several core areas, including protocol development, user experience, community growth, and institutional adoption.

The spending cuts also come as concerns grow over the future funding of Ethereum’s core development ecosystem.

Former Ethereum Foundation contributor, Trent Van Epps, recently warned that Ethereum could face a ‘slow-burning’ funding crisis within the next three to nine months as key funding programs expire and the foundation reduces expenditures.

He estimated that sustaining Ethereum’s network of client teams and research groups requires roughly $30 million annually, raising concerns that critical contributors could struggle to secure long-term support.

Van Epps argued that the issue extends beyond a temporary funding gap and reflects broader structural challenges in how Ethereum finances public-goods development, a concern that has gained attention amid the foundation’s spending reductions and several high-profile departures from its research ranks this year.

The Foundation has been criticized for funding education and low-value activity, particularly in emerging markets, at the expense of other high-value and high-growth initiatives similar to rival chains like Solana.

The Ethereum Foundation has sought to frame the overhaul as a strategic reset rather than a retrenchment saying the organization must become more focused as Ethereum matures from an experimental blockchain project into a global financial and computing infrastructure.

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