The Ethereum Foundation (EF) is implementing a 40% budget cut and 20% staff reduction, affecting 54 roles, as part of a planned transition to a leaner, endowment-style organization. Co-founder Vitalik Buterin described the cuts as a deliberate trade-off, not an efficiency drive, leading to concrete losses such as a smaller Devcon, wind-down of Privacy and Scaling Explorations, and fewer external projects. The foundation's June 2025 treasury policy sets annual spending at 15% of holdings with a 2.5-year cash buffer, aiming for a 5% endowment baseline by 2030. To reduce ETH sales, it will rely on staking and DeFi yield. Buterin tied the budget to Ethereum's Strawmap, the network's third iteration, emphasizing AI-assisted formal verification to lower upgrade costs. Solana co-founder Anatoly Yakovenko viewed the cuts as bullish, arguing budget constraints force focus and faster decision-making. However, former EF contributor Trent Van Epps warned of a $30 million annual funding gap for core development. BitMine chairman Tom Lee dismissed crisis talk, noting private backers and stakers may fill the gap. Days earlier, five former EF researchers launched Ethlabs, an independent nonprofit backed by Lee and Ethereum co-founder Joe Lubin to drive institutional adoption. Ether's price fell 5% to below $1,660, retaining its second-largest crypto rank with a $200 billion market cap.

Key facts

• Ethereum Foundation cuts budget by 40% and 54 staff roles (20% of workforce).
• Vitalik Buterin cites concrete losses: smaller Devcon, wind-down of Privacy and Scaling Explorations.
• New treasury policy: 15% annual spend, 2.5-year cash buffer, target 5% endowment by 2030.
• Solana co-founder Yakovenko calls cuts bullish for Ethereum's decisiveness and speed.
• Five former EF researchers launch Ethlabs, backed by Joe Lubin and Tom Lee.
• ETH price falls 5% to below $1,660 amid reorganization uncertainty.

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