From EF to Ethlabs: How is Ethereum governance undergoing a power restructuring?

June, Week 3, 2026: The Ethereum ecosystem experiences the most intensive organizational shifts since the mainnet launched in 2015.

On June 22, five former Ethereum Foundation researchers announced the establishment of Ethlabs, an independent non-profit R&D organization, backed by multiple funders including Ethereum co-founder Joe Lubin, two major publicly traded ETH holding companies Bitmine Immersion Technologies and SharpLink Gaming. The next day, the official Ethereum Foundation blog posted an announcement ending months of organizational restructuring, laying off 54 staff—about 20% of the total—and reorganizing into five core functional clusters. On the same day, Vitalik Buterin confirmed that the Foundation’s 2026 budget would be cut by approximately 40%, with plans to reduce annual expenditure from about 15% to around 5% by 2030, shifting toward a long-term grant fund model.

Between advances and retreats, Ethereum is sending a clear signal: the Foundation is proactively ceding its position, with ecosystem organizations taking on more executive functions. This may be the most significant governance revision since Ethereum’s inception.

Foundation Restructuring: Structural Shift Behind the Numbers

54 People and 40%

This round of Ethereum Foundation adjustments is not an isolated event but a direct implementation of the “Curation Management Policy” released in June 2025 and the “Mission Charter” issued in March 2026. According to official statements, the ultimate goal of this restructuring is to fully execute these two guiding documents, ensuring Ethereum continues as a truly permissionless, autonomous sovereign infrastructure.

From a data perspective, the layoff of 54 staff accounts for roughly 20% of the previous total workforce. Based on this, the Foundation’s pre-restructuring headcount was approximately 270, though no exact figure has been provided. Regarding budget, Vitalik Buterin explicitly stated that the Foundation is transitioning from a “spending organization” to a “grant fund model,” with the goal of reducing annual expenditure from about 15% to around 5% by 2030.

Five Core Clusters and New Roles

Post-restructuring, the Foundation is divided into five core working clusters: Protocol, Access, User, Community, and Institutional, with an additional cluster for operations and management support.

The Protocol cluster bears Ethereum Foundation’s most critical legacy and responsibilities—ensuring the network’s core principles of resistance to censorship, capture, open-source openness, privacy, and security are maintained. The Access layer focuses on enabling users to perform key operations such as reading the chain, transacting, proving, delegating, and exiting without relying on unverifiable intermediaries, following the “zero options” principle—every mediated path must have a trusted, trustless alternative accessible path. The User, Community, and Institutional layers reclassify previously scattered external connections, aligning with real user pain points, open-source and civil liberties allies, and financial institutions and policy coordination respectively.

Notably, the Privacy and Scalability Exploration department (PSE) has been formally disbanded, with related work shifting toward specific technical developments deemed important. The multi-client strategy is evolving from redundant security modes to a path based on role division and AI-assisted formal verification. Ecosystem activities like Devcon will gradually scale down, and the Foundation will reduce involvement with non-Ethereum large projects.

Leadership Vacuum

Alongside organizational restructuring, there has been ongoing leadership attrition over several months. On June 18, Co-Executive Director Hsiao-Wei Wang announced her resignation to return to research. Her departure followed that of fellow Co-Executive Director Tomasz Stańczak, leaving both co-CEO positions vacant. Since January 2026, at least nine senior members have left the Foundation.

Former Ethereum researcher Dankrad Feist commented on social media: “People leaving the Ethereum Foundation are all CROPS believers. The issue isn’t strategy, it’s management.” Coinbase engineering lead Yuga Cohler bluntly stated: “It’s sad to see the dysfunction of the Ethereum Foundation.”

Ethlabs: Filling the Vacuum or Creating a New Center?

Five Former Researchers and Institutional-Level Positioning

Amid the Foundation’s contraction, a new organization called Ethlabs emerged prominently on June 22. Its five co-founders—Ansgar Dietrichs, Barnabé Monnot, Caspar Schwarz-Schilling, Josh Rudolf, and Julian Ma—are all former Ethereum Foundation employees who left in the first half of 2026. During their time at EF, they deeply engaged in research and development on finality mechanisms, scalability, data availability, EVM and zkEVM optimization, protocol economics, and L1/L2 interoperability.

Unlike traditional academic research institutions, Ethlabs aims for pragmatic goals—addressing key needs for large-scale on-chain adoption by institutions, including faster settlement, native asset issuance, cross-chain transactions based on robust infrastructure, network capacity expansion, and foundational research supporting ETH’s monetary properties.

This choice is driven by clear market logic. Ethereum dominates a $300 billion stablecoin market, holding 53% of the market share, and supports about half of the roughly $32 billion tokenized assets market. However, in real institutional adoption, on-chain finance scale, and user experience, Ethereum’s advantages are not as solid as market imagination suggests. While Ethereum is rich in research and ideas, the missing link is translating research into market adoption at the middleware layer.

Funding Structure and Independence Concerns

Ethlabs’ funding comes from Bitmine, SharpLink, Joe Lubin, Anchorage Digital, Octant, SNZ, among others. According to Ethlabs, funds are managed by an external grant management organization, with funders only able to review quarterly reports and annual audits for accountability. They do not control research agendas or technical directions. Final technical decisions are made by Ethlabs’ leadership.

However, a long-standing question in Ethereum governance is: how much informal influence can a single entity or individual exert? Ethlabs’ organizers emphasize independence and collective management to address this concern, but market observers remain attentive to whether the research priorities reflect certain commercial interests of ConsenSys.

Vitalik’s Absence

Vitalik Buterin’s name does not appear on the list of supporters on Ethlabs’ official website. This may not indicate disagreement but rather a deliberate effort to avoid giving the organization a strong personal endorsement or path interference. Since 2026, Vitalik has published only two articles on his blog, compared to at least 15 per year previously. This change is noteworthy—it doesn’t imply diminished influence but rather a conscious restraint: shifting Ethereum from a “founder-driven public narrative” to a “multi-organization, multi-team, multi-stakeholder collaborative technical network.”

Funding Crisis and Governance Debate

$30 Million Shortfall

Beyond the news of Foundation restructuring and Ethlabs’ establishment, a heated debate over core development funding has emerged. On June 20, former Ethereum Foundation contributor Trenton Van Epps warned that as old support programs expire and Foundation expenditures shrink, the core ecosystem may face a “slow-burning” funding crisis within three to nine months. Maintaining over a dozen client teams, research, and coordination efforts costs roughly $30 million annually.

Validator Tax Proposal: Controversy

The core of the debate centers on a proposal by Clément Lesaege, co-founder of Kleros, to redirect 0%-10% of validator rewards into an ecosystem fund pool. At current staking levels, this could generate about 50k to 70k ETH annually.

The proposal has faced widespread opposition. Critics warn it could entrench the influence of large validators, blur the boundaries between node operation and community governance, and pose governance risks. The fundamental issue is whether Ethereum’s future development should be funded via protocol-level mandatory validator taxes—making staking weight votes binding at the consensus layer—or through a more decentralized model where institutions directly fund R&D.

Some community members counter that the Foundation’s funds are sufficient for 30 years of operation, but actual Foundation decision-making indicates a move toward shrinking expenditures and diversifying funding sources.

Ethlabs as an Alternative

In this context, the establishment of Ethlabs is seen by some as a third path to break the funding deadlock—large ETH holders directly funding development instead of protocol-level mandatory taxes. Whether this model can truly replace the ongoing $30 million annual development funding remains to be seen.

Paradigm Shift in Ethereum Development

From Centralized to Multi-Node

Ethereum co-founder Joe Lubin stated about Ethlabs: “We are now ready to acknowledge and implement the idea that Ethereum should have a set of steward nodes, each developing and protecting the network in their own way, and allowing the world to appreciate and utilize it at scale.”

This precisely captures the paradigm shift Ethereum is undergoing: from a development model coordinated mainly through a Foundation-managed node to a multi-organization, multi-team, multi-stakeholder governance structure. The Foundation no longer seeks to control the roadmap, development, promotion, or adoption.

2026 Roadmap’s Technical Anchors

While organizational changes are underway, Ethereum’s technical roadmap continues. Major upgrades planned for 2026 include Glamsterdam (expected in the first half), parallel transaction execution, significant Gas limit increases, further blob expansion, enhanced censorship resistance, and native account abstraction. Vitalik announced a five-year roadmap covering 2026–2030 at the April 2026 Web3 Carnival in Hong Kong, emphasizing scaling, post-quantum security, and ZK-EVM verification as three core pillars.

Risks and Uncertainties

However, governance restructuring introduces new uncertainties. Foundation contraction may reduce protocol research focus, and whether new organizations like Ethlabs can effectively take over these functions remains to be seen. Diversified funding reduces reliance on a single source but introduces new coordination costs and potential conflicts of interest. If leadership gaps are not filled promptly, decision-making efficiency and strategic coherence could suffer.

Former researcher Dankrad Feist’s comment is worth pondering: “Talent loss is definitely bearish for Ethereum, unfortunately.” This is not an emotional statement but based on a verifiable premise: one of Ethereum’s core strengths is its ability to attract top cryptography and distributed systems talent worldwide. Discontinuity in talent flow could directly impact protocol evolution quality and speed.

Conclusion

In June 2026, Ethereum is undergoing three parallel but interconnected transformations: the Foundation’s organizational contraction from builder to lightweight governance, the rise of new entities like Ethlabs taking on execution roles, and the shift from a single Foundation-funded development model to a multi-institutional funding approach.

All these shifts point toward a clear goal: Ethereum is trying to change how its direction is generated. It is moving away from a centralized non-profit controlling everything toward a multi-organization, multi-team, multi-stakeholder governance structure. Whether this transition succeeds depends on two key variables: whether new organizations can gain ecosystem trust and produce tangible results without direct founder endorsement; and whether the diversified governance can maintain core values like censorship resistance and capture resistance while improving or at least not impairing Ethereum’s execution efficiency and strategic focus.

For market participants, these organizational changes may have more profound long-term implications than any single technical upgrade. Ethereum’s development future is shifting from a founder’s roadmap to an ecosystem’s roadmap.

FAQ

Q: Why did Ethereum Foundation lay off 54 staff and cut 40% of its budget?

It’s part of the Foundation’s transition to a “grant fund model,” aiming to reduce annual expenditure from about 15% to roughly 5% by 2030, to ensure long-term sustainability. The Foundation is also shifting from a “main builder” role to a “lighter protocol governance and maintenance” role.

Q: What is the relationship between Ethlabs and the Ethereum Foundation?

Ethlabs is an independent non-profit organization initiated by five former EF researchers, with no direct affiliation. It is funded by Bitmine, SharpLink, Joe Lubin, and others, focusing on technical R&D for institutional-scale applications—serving as a supplement to the ecosystem’s “execution layer” after Foundation contraction.

Q: How serious is the Ethereum funding crisis?

Former EF contributor Trenton Van Epps warned that maintaining over a dozen client and research teams costs about $30 million annually, and current funds might face pressure within 3 to 9 months. Some community members believe the Foundation’s reserves could support 30 years of operation. The actual situation depends on spending pace and new funding inflows.

Q: Why is the validator tax proposal controversial?

It proposes redirecting 0%-10% of validator rewards into an ecosystem fund. Critics argue it could entrench large validators’ influence and blur operational and governance boundaries. The core debate is whether Ethereum’s public goods funding should be enforced via protocol-level mechanisms or voluntary institutional donations.

Q: What do these changes mean for Ethereum’s long-term development?

Ethereum is transitioning from a “Foundation-led, centralized development model” to a “multi-organization, multi-team, multi-stakeholder governance.” This could enhance ecosystem resilience but also introduces new coordination costs, potential conflicts of interest, and talent retention risks. The actual impact depends on the effectiveness of new organizations and governance mechanisms.