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Ethereum Foundation Cuts Another 40%, but Solana Co-Founder Says This Is Bullish

The Ethereum Foundation is reducing its budget by about 40% and also cutting staff by around 20%, marking the end of a planned shift toward a leaner, endowment-style organization with more limited priorities.

Co-founder Vitalik Buterin calls this cut a conscious choice, not an efficiency effort. Solana co-founder Anatoly Yakovenko even believes a leaner foundation will move faster and deliver a positive impact for Ethereum.

What Was Removed from the Budget Cuts

The foundation confirmed the elimination of 54 job positions, nearly one-fifth of its staff. It is also reorganizing into seven main clusters focused on protocol security, resistance to censorship, and privacy.

Buterin does not describe these reductions solely as an efficiency measure. He cites some tangible losses. These include a smaller Devcon, the discontinuation of Privacy and Scaling Explorations, and fewer projects outside Ethereum.

The Ethereum co-founder also signaled its waning influence on the board.

The foundation’s treasury policy for June 2025 sets annual spending at 15% of total assets, with cash reserves for 2.5 years. The foundation targets a baseline endowment of 5% around 2030.

To reduce sales of
ETHUSD
, the foundation is now relying more on yield from staking and DeFi rather than selling core capital.

“This year, EF is cutting its budget by about 40%, which of course requires some difficult decisions… EF is transitioning into a long-term endowment-based organization that focuses on the long term…,” wrote Vitalik Buterin .

Buterin ties this budget to Ethereum’s Strawmap, which he describes as the network’s third era after the Merge.

He wants this core protocol update to be completed soon, then to raise the standard for new features. He also expects the feature rollout process to become more streamlined.

Buterin states that parts of the protocol will rely more on AI-based formal verification than on client redundancy, which will lower upgrade costs.

Solana Co-Founder Sees the Positive Side

Not everyone views these cuts as a setback. Solana co-founder Yakovenko argues that a tighter budget will force the team to focus more.

“Bullish… Budget limits force prioritization and focus. Ethereum won’t disappear. A smaller, leaner EF will be more decisive, able to move faster, and better able to make decisions when it needs to correct course,” the Solana executive wrote .

Skeptics see risks. Former foundation contributor Trent Van Epps warns of a possible funding shortfall of about US$30 juta per year for core development.

BitMine chair Tom Lee dismisses talk of this crisis and believes that support from private parties and stakers will fill the gap.

The bet is already starting to show. A few days earlier, five former foundation researchers launched an independent nonprofit called Ethlabs. Lee and Ethereum co-founder Joe Lubin back it to accelerate adoption by institutions.

Ethereum reflects the unease. Ether’s price movement fell below US$1.660, dropping about 5% in 24 hours. Ether remains the second-largest crypto asset by valuation, at around US$200 billion.

The next treasury report and future protocol achievements will be tests of this bet.

We’ll see whether a smaller foundation can move faster, as Yakovenko predicts, or whether losing talent will slow down Ethereum’s biggest upgrades so far.