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Ethereum Foundation Cuts Another 40% but Solana Co-Founder Calls It Bullish
The Ethereum Foundation is reducing its budget by about 40% and cutting staff by roughly 20%, marking the end of a planned shift toward a leaner endowment-style organization with more limited priorities.
Co-founder Vitalik Buterin described the cuts as a conscious choice, not an efficiency drive. Solana co-founder Anatoly Yakovenko even argued that a leaner foundation would move faster and have a positive impact on Ethereum.
What Is Being Eliminated from the Budget Cuts
The foundation confirmed the elimination of 54 positions, nearly a fifth of its staff. It is also reorganizing into seven main clusters focused on protocol security, censorship resistance, and privacy.
Buterin did not portray the reduction merely as an efficiency measure. He mentioned several tangible losses. These include a smaller Devcon event, the termination of Privacy and Scaling Explorations, and fewer projects outside of Ethereum.
The Ethereum co-founder also signaled his diminishing influence on the board.
The foundation's June 2025 treasury policy sets an annual spending rate of 15% of total assets, with 2.5 years of cash reserves. The foundation targets a 5% endowment baseline around 2030.
To reduce ether sales
ETHUSD
, the foundation now relies more on yield from staking and DeFi rather than selling its principal capital.
"This year, the EF reduced its budget by about 40%, which certainly required some difficult decisions… The EF is transitioning into an endowment-based organization with a long-term focus…," wrote Vitalik Buterin.
Buterin linked this budget to the Ethereum Strawmap, which he called the network's third era after The Merge.
He wants these core protocol upgrades completed soon, then raise the bar for new features. He also expects the feature rollout process to become leaner.
Buterin stated that the protocol part will rely more on AI-based formal verification than client redundancy, thereby lowering upgrade costs.
Solana Co-Founder Sees the Bright Side
Not everyone sees the cuts as a setback. Solana co-founder Yakovenko argued that tight budgets will force teams to focus more.
"Bullish… Budget constraints force prioritization and focus. Ethereum is not going anywhere. A smaller, leaner EF will be more decisive, can move faster, and is better able to make decisions when course corrections are needed," wrote the Solana executive.
Skeptics see risks. Former foundation contributor Trent Van Epps warned of a possible funding shortfall of about US$30 million per year for core development.
BitMine chairman Tom Lee dismissed talk of a crisis and believes support from private parties and stakers will fill the gap.
That bet is already playing out. A few days earlier, five former foundation researchers launched an independent nonprofit called Ethlabs. Lee and Ethereum co-founder Joe Lubin are backing it to accelerate institutional adoption.
Ethereum reflects the unease. Ether's price movement dropped below US$1,660, falling about 5% in 24 hours. Ether remains the second-largest crypto asset with a valuation of around US$200 billion.
The next treasury report and upcoming protocol milestones will test this bet.
We will see whether a smaller foundation can move faster, as Yakovenko predicted, or whether losing talent will slow down Ethereum's biggest upgrade so far.