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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 about 20%, marking the end of a planned shift toward a leaner, endowment-style organization with more limited priorities.
Co-founder Vitalik Buterin called the cuts a conscious choice, not an efficiency effort. Solana co-founder Anatoly Yakovenko even argued that a leaner foundation would move faster and have a positive impact on Ethereum.
What Is Being Cut from the Budget Reduction
The foundation confirmed the elimination of 54 job positions, nearly a fifth of its staff. They are also reorganizing into seven main clusters focused on protocol security, censorship resistance, and privacy.
Buterin did not describe these reductions merely as an efficiency measure. He cited some real losses. These include a smaller Devcon, the cessation 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 fund utilization of 15% of total assets, with a cash reserve of 2.5 years. The foundation targets a baseline endowment of 5% around 2030.
To reduce ether sales
ETHUSD
, the foundation now relies more on yield from staking and DeFi rather than selling 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 to be completed soon, then raise the bar for new features. He also expects the feature rollout process to become leaner.
Buterin stated that the protocol side will rely more on AI-based formal verification than client redundancy, thus lowering upgrade costs.
Solana Co-Founder Sees the Positive Side
Not everyone sees these cuts as a setback. Solana co-founder Yakovenko argued that a tight budget will force teams to be more focused.
“Bullish… Budget constraints 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 course corrections are needed,” wrote the Solana executive.
Skeptics see risks. Former foundation contributor Trent Van Epps warned of a possible funding shortfall of around 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 showing. 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 fell below US$1,660, dropping 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 be the test of this bet.
We will see whether a smaller foundation can move faster, as Yakovenko predicted, or whether the loss of talent will slow down Ethereum's biggest upgrade so far.