From "a foundation" to "multi-node governance": Is Ethereum undergoing a quiet power restructuring?

Over the past two weeks, an unprecedented shift has been taking place at the organizational level of Ethereum.

• On June 22, 2026, five former core researchers from the Ethereum Foundation announced the formation of Ethlabs, an independently operated nonprofit research and development laboratory;
• One day later, the EF unveiled its new organizational structure, confirming that it would part ways with 54 employees—roughly 20% of the foundation's total headcount;
• On July 1, another independent nonprofit, Ethereum Institutional, officially launched, taking over the institutional partnership work previously handled by the EF's business development team;

Viewed separately, these events could easily be summarized into a familiar pessimistic narrative—that the foundation is facing a financial crisis, core talent is leaving, and the ecosystem is in turmoil.

The market is indeed awash with similar rhetoric.

But if we place them on the same timeline, we can actually see a more complete picture: Ethereum is consciously reducing its reliance on a single foundation, gradually dispersing the various functions once concentrated within the EF across multiple independent, specialized ecosystem nodes.

Ethereum finally seems to be attempting to answer a long-standing question: When a decentralized network gradually becomes global infrastructure, what should the organizations driving its development look like?

I. Why is the EF "actively shrinking"?

To be fair, interpreting this series of changes through the lens of traditional business contexts can easily lead most users to misunderstand, since in the narrative of traditional tech companies, layoffs almost always imply revenue pressure, business contraction, or strategic failure.

But the Ethereum Foundation is no ordinary company.

It has no shareholders in the traditional sense, does not target market share or quarterly profits, and does not "own" the Ethereum network in any real way. In a sense, the EF is more akin to a protocol guardian, whose primary responsibilities are supporting core protocol research and development, funding public goods, coordinating ecosystem resources, and guarding the principles that should not be easily compromised during Ethereum's development.

This also means the EF has always faced an inherent tension.

On one hand, Ethereum needs long-term investment in protocol R&D, organizational upgrades, and public goods construction; on the other hand, if R&D, funding, talent, and decision-making increasingly concentrate within the foundation, then the EF itself becomes Ethereum's greatest source of centralization risk.

Therefore, the EF has long adhered to an organizational philosophy of "doing less." According to the EF's explanation of this philosophy, a healthy Ethereum ecosystem should not rely on an ever-expanding foundation, but should be sustained by a large number of independent organizations and contributors. Hence, the foundation's success should ultimately manifest as a gradual decline in its relative influence, not unlimited growth.

This approach is not an ad hoc decision. In the treasury policy announced in 2025, the EF explicitly stated its plan to gradually narrow its scope of responsibilities, aiming to reduce annual operational expenditures over the next five years and ultimately converge toward a longer-term, more sustainable foundation model.

A few months ago, we also noted that since 2025, the EF had indeed experienced a rather awkward period. At that time, the EF was at the center of a media storm, with widespread community criticism and even calls for a so-called "wartime CEO" to drive change. Ultimately, a series of internal power struggles became public, forcing the highest-profile restructuring since the EF's founding:

• Early in the year, Executive Director Aya Miyaguchi was promoted to President, and Vitalik Buterin promised to restructure leadership;
• Subsequently, Hsiao-Wei Wang and Tomasz K. Stańczak were appointed as Co-Executive Directors;
• Meanwhile, the new marketing and narrative agency Etherealize, led by former researcher Danny Ryan, was established;
• At the same time, the EF further restructured its board, clarified its cypherpunk value orientation;
• By mid-year, the foundation also reorganized its R&D departments, consolidating teams and adjusting personnel to ensure focus on core protocol priorities;

As it turned out, this series of moves significantly enhanced Ethereum's execution capability—on May 7, 2025, the Pectra upgrade was officially activated; less than seven months later, on December 3, Fusaka successfully launched on mainnet. In its subsequent annual summary, the EF called 2025 one of the most productive years for Ethereum's protocol layer. These two major upgrades also brought the often-discussed goal of "accelerating hard fork cadence" closer to reality (see also: Ethereum 2026: Decoding the EF's Latest Protocol Roadmap, Entering the Era of 'Engineering Upgrades'?).

Therefore, from this perspective, the layoffs in June 2026 appear more like the first time this long-term strategy has been presented to the outside world in the most intuitive way.

After the adjustment, the EF's work is divided into five main clusters: Protocol Layer, Access Layer, User Layer, Community Layer, and Institutional Layer, plus operations, management, and related support teams. The EF explained that cutting about 20% of staff is meant to concentrate organizational and financial resources on "work that only the EF can and must do."

This is also an organization actively shrinking its own boundaries. So, to whom should it cede some of its tasks?

II. How to View Ethlabs and Ethereum Institutional?

If we need an analogy, the author's understanding is that this change somewhat resembles "the Partition of Jin" in ancient China: The talent, R&D, and institutional functions originally concentrated within the EF are beginning to disperse across different organizations.

But in terms of actual relationships, it is more akin to a functional split rather than a power struggle. That is, EF, Ethlabs, and Ethereum Institutional do not have a parent-subsidiary or hierarchical relationship within a traditional corporate system; they are more like three nodes within Ethereum's governance network, each with different positioning but interconnected.

First, Ethlabs.

Although it was announced one day before the EF's layoff plan—founded by five former Ethereum Foundation researchers: Ansgar Dietrichs, Barnabé Monnot, Caspar Schwarz-Schilling, Josh Rudolf, and Julian Ma—who indeed were prominent figures in areas like Ethereum finality, scaling, data availability, virtual machines, and protocol economics.

But Ethlabs explicitly defines itself as an independent nonprofit R&D lab serving Ethereum and ETH, with a mission summed up in one sentence: "Making Ethereum the settlement layer for the global economy."

In Ethlabs' narrative, Ethereum should not be just a blockchain for issuing tokens and running applications, but should become a neutral settlement infrastructure used jointly by digital assets, stablecoins, on-chain markets, institutions, and AI agents.

This mission determines a key difference between Ethlabs and the EF:

• The EF's core task is to ensure Ethereum does not sacrifice censorship resistance, privacy, and user sovereignty for short-term adoption and commercial interests. Its official organizational description even explicitly states that the protocol team's job is not to make Ethereum easier to market or turn it into a financial track controlled by intermediaries.
• Ethlabs, on the other hand, can more explicitly discuss growth, ETH value capture, institutional needs, and real-world adoption.

In other words, it positions itself between two worlds. On one side are wallets, applications, Layer 2s, infrastructure teams, institutions, and real users; on the other side is Ethereum's core protocol, researchers, and core developers. It actively translates the real needs of the former into protocol R&D, shared standards, infrastructure, and products that can actually be deployed.

This also helps us better understand Ethereum Institutional's positioning. If Ethlabs takes over the "transformation of R&D toward growth" after the EF's retreat, then Ethereum Institutional takes over the "commercial and compliance promotion" that the EF previously undertook.

Simply put, this nonprofit directly takes over the institutional partnership work that the EF's business development team had been doing for over a year, positioning itself as the "neutral front door" for traditional institutions entering the Ethereum ecosystem. It aims to answer a question Ethereum has long failed to address: When a bank or asset manager wants to deploy a product on Ethereum, who exactly should they approach?

This question has become increasingly urgent in recent years.

As is well known, ecosystems like Solana have more clearly defined foundations, business development teams, and institutional partnership windows. With highly paid and aggressive business teams, they have been continuously advancing in global financial institutions. In contrast, Ethereum, due to its emphasis on decentralization and credible neutrality, has long lacked a unified external interface.

There is a deep contradiction here. Neutrality is an advantage in technology and governance, but in a real business environment, neutrality also means "no clear person in charge." When an institution like BlackRock wants to deploy on Ethereum, it expects a team on the other side that can maintain ongoing communication, rather than a foundation with an aloof, neutral stance unwilling to cater to Wall Street and sovereign wealth funds like a traditional company.

Ethereum Institutional is exactly meant to resolve this contradiction. No one can represent Ethereum, but institutions still need a consistent point of contact.

So, incubated with funding from Bitmine, Sharplink, and Joe Lubin, and led by seasoned professionals like former BlackRock veteran Joseph Chalom, this positioning will undoubtedly be a significant advantage, helping to directly engage banks, asset managers, custodians, market infrastructure providers, fintech companies, and sovereign institutions.

According to its published information, Ethereum Institutional covers five main areas of work, primarily helping people understand Ethereum, raise requirements, and convert these requirements into real on-chain projects:

• Institutional Education & Communication: Help traditional financial institutions understand Ethereum's technical architecture, governance model, and ecosystem status;
• Institutional Market Intelligence: Track and analyze trends, barriers, and best practices for institutional adoption of Ethereum;
• ETH & Ethereum Ecosystem Promotion: Communicate Ethereum's value proposition to the traditional financial world;
• Industry Needs & Standards Research: Convert institutions' actual needs into standards proposals and product requirements;
• Institutional Events & Relationship Networks: Continuously build relationships in financial hubs like New York, London, Hong Kong, and Singapore;

Thus, a clearer division of labor for Ethereum is emerging: The EF handles protocol values and public goods, Ethlabs handles the conversion between R&D and growth, Ethereum Institutional handles institutional adoption, while wallet, application, and infrastructure teams handle the final product and user experience.

This also means that Ethereum governance is shifting from the previously vague "EF coordinates everything" to a more modular structure.

III. From "Ethereum Driven by the EF" to "The Ecosystem Guardians Together"

In the past, although Ethereum's governance structure was highly open, many critical responsibilities still naturally gravitated toward the EF, which could even be summarized as the vague "EF coordinates everything."

When protocol R&D encountered problems, people looked to the EF; when the market narrative lagged, people criticized the EF; when ETH underperformed, institutional adoption was slow, or user experience didn't improve, the outside world often placed the blame on the EF.

This itself is a contradiction. Ethereum aspires to be a decentralized network that does not rely on any single organization, yet the entire ecosystem has long been accustomed to treating the EF as the ultimate responsible party.

Now, a more modular structure is taking shape. Each key function has a corresponding independent organization to handle it. They are no longer in a superior-subordinate relationship but are interconnected through shared protocol goals and ecosystem interests.

Of course, this does not mean Ethereum has found a perfect new governance model. On the contrary, the real test has only just begun.

When different functions are dispersed to independent organizations, Ethereum will face higher coordination costs. It also needs to prevent different teams from working in silos, duplicating research, having funding sources influence technical direction, or institutional adoption gradually overriding the interests of ordinary users.

But from another perspective, this uncertainty itself is the price that must be paid for decentralization. A truly decentralized protocol should not forever rely on an ever-expanding foundation, nor should it lose its ability to continue developing just because a few core members leave.

The key to judging the success of this transformation is not how many people remain in the EF, but:

• Whether the core protocol can continue to upgrade stably;
• Whether research talent, after leaving the EF, can remain within the Ethereum ecosystem;
• Whether independent organizations can maintain collaboration and mutual checks and balances;
• Whether institutional adoption can expand without sacrificing openness and user sovereignty;
• Whether wallets and applications can translate bottom-line progress into products that ordinary users can actually use;

If these goals can be achieved, the decline in the EF's influence may actually prove that Ethereum is becoming more mature.

At that point, Ethereum will no longer be a sapling that needs constant support from the foundation, but will become an ecosystem sustained jointly by foundations, research institutions, developers, wallets, applications, businesses, and users.

Just like Ethereum's own decentralized network architecture, Ethereum's governance structure has finally become distributed in 2026.

We have always believed that this is not the end of a crisis, but a new beginning for a more resilient and vibrant Ethereum ecosystem.