The Ethereum Foundation (EF) on June 23 eliminated 54 positions — roughly 20% of its approximately 270-person workforce — and announced a 40% reduction to its 2026 operating budget. The restructuring, which shuttered the Privacy and Scaling Explorations (PSE) zero-knowledge research unit and reor...
"The EF will be a smaller ship than in previous years, a more opinionated one, in some cases more opinionated in ways that might be difficult to comprehend, but a longer-lasting one." — Vitalik Buterin, Ethereum Co-Founder
The Ethereum Foundation (EF) on June 23 eliminated 54 positions — roughly 20% of its approximately 270-person workforce — and announced a 40% reduction to its 2026 operating budget. The restructuring, which shuttered the Privacy and Scaling Explorations (PSE) zero-knowledge research unit and reorganized remaining staff into five domain-focused clusters, concludes an 18-month transformation marked by nine senior leadership departures since January 2026, including both co-executive directors.
One day before the announcement, five former EF senior researchers launched Ethlabs, an independent nonprofit backed by BitMine Immersion Technologies (NYSE: BMNR), SharpLink (NASDAQ: SBET), and Ethereum co-founder Joseph Lubin. Ethlabs will focus on preparing Ethereum for institutional-scale adoption — a mandate the leaner EF is explicitly ceding to ecosystem spinoffs.
ETH has declined approximately 44% year-to-date to roughly $1,655 as of the announcement date, despite recording 200.4 million transactions in Q1 2026 — a record. The disconnect between protocol usage and token performance frames the restructuring as a governance response to economic pressure rather than a technical failure.
The EF's June 23 blog post confirmed the elimination of 54 roles and a budget reduction of approximately 40% for 2026. Departing employees receive severance equal to the greater of one month's salary per year of service or locally mandated minimums, plus ecosystem placement assistance and a small transition grant for career coaching.
The most consequential organizational casualty is the Privacy and Scaling Explorations unit, most recently rebranded as "Privacy Stewards of Ethereum." PSE served as the EF's in-house applied cryptography team, maintaining projects including MACI (private voting infrastructure), Semaphore (anonymous credential tooling), PlasmaFold (privacy-enabled Layer 2 transfers), and private RPC infrastructure designed to prevent IP address leakage from on-chain queries. PSE also led "prove anywhere" research aimed at making zero-knowledge proof generation feasible on consumer devices.
With PSE wound down, the EF's Protocol Cluster retains "L1 privacy" as a long-horizon research goal, but the applied-cryptography execution capacity that PSE represented has been disbanded. The Foundation has signaled it expects the broader ecosystem to carry this work forward.
Future Devcon conferences, historically among the largest gatherings in the Ethereum ecosystem, will also be scaled back in size and cost.
The restructuring concludes a turbulent period for EF leadership. At least nine senior figures have left since January 2026:
| Name | Role | Departure | |------|------|-----------| | Tomasz Stańczak | Co-Executive Director | February 2026 | | Josh Stark | Senior Contributor | ~May 2026 | | Trent Van Epps | Developer Relations | ~May 2026 | | Tim Beiko | Protocol Support Lead | 2026 | | Barnabé Monnot | Protocol Economist | 2026 (joined Ethlabs) | | Carl Beek | Senior Researcher | 2026 | | Julian Ma | Senior Researcher | 2026 (joined Ethlabs) | | Caspar Schwarz-Schilling | Senior Researcher | 2026 (joined Ethlabs) | | Hsiao-Wei Wang | Co-Executive Director | June 18, 2026 |
Wang, who joined the EF research team in 2017 and helped architect Ethereum's proof-of-stake transition, announced her departure via X, stating that a recent sabbatical "gave me space to reflect on my priorities and the kind of life I want to build next."
With both co-executive directors gone, board member Bastian Aue — who joined as interim co-executive director in February 2026 — now leads day-to-day operations. Buterin described the foundation's new long-term organizational form as something that "should stabilize over the next few months."
Trent Van Epps warned of a "slow-burning funding crisis" for core development teams upon his departure — a concern the EF's endowment model is designed to address, though at reduced scale.
The reorganized EF comprises five core work clusters and two operational divisions:
Protocol Layer. Responsible for Ethereum's core technical commitments: safe fork delivery, complexity reduction, MEV mitigation, post-quantum security research, zkEVM development, and L1 privacy. This cluster carries the EF's legacy mandate of "scaling self-sovereignty."
Access Layer. Implements the "zero option" principle: for every intermediated service path on Ethereum, a credible intermediary-free alternative must exist. Covers chain reading, private transactions, proof generation, delegation, and user exit mechanisms.
User Layer. Maintains user personas, educational materials, use-case research, and impact evaluation. Tasked with keeping EF work grounded in organizations and individuals with "vital interests in self-sovereign use of Ethereum."
Community Layer. Manages ecosystem coordination, grants, and developer community relations.
Institutional Layer. A new addition — dedicated to enterprise engagement, financial infrastructure partnerships, and policy coordination. The creation of this cluster reflects the EF's acknowledgment that institutional adoption now requires a dedicated organizational focus.
Two additional divisions — Operations and Management/Executive Support — handle internal functions.
The EF has also signaled a shift toward AI-assisted formal verification to partially offset reduced headcount in protocol research.
The EF's treasury management undergirds the entire restructuring logic. Key figures:
Buterin framed the fiscal strategy directly: "The EF is choosing to use its remaining resources to pursue longevity over breadth — yes, this means we sell less ETH."
At 5% annual drawdown and current ETH prices, the EF's treasury would support approximately $8.5M per year in spending — a fraction of its historical annual burn. The math assumes either ETH price appreciation or supplementary revenue from staking yields and ecosystem partnerships to sustain meaningful operations long-term.
Ethlabs launched June 22 — one day before the EF's restructuring announcement — as an independent nonprofit research and development organization. Its founding team of five all held senior EF roles:
Funding comes from BitMine Immersion Technologies (NYSE: BMNR), SharpLink (NASDAQ: SBET), Ethereum co-founder Joseph Lubin, plus Anchorage, Octant, and SNZ. Funding flows through an independent grants administrator responsible for screening and disbursement; research priorities are determined by Ethlabs leadership, not funders.
Stated focus areas include faster settlement, native asset issuance, cross-chain infrastructure, mainnet capacity research, and analysis of ETH's monetary properties. Lubin stated: "Ethlabs will be instrumental in preparing the network for the next major wave of adoption, from institutional finance to agentic commerce."
Lubin separately noted that Ethereum "will not have a second foundation," positioning Ethlabs as a complementary spinoff rather than a rival governance body. The organizational model — senior EF talent departing to form independently funded research groups — may represent the template for how Ethereum development proceeds: decentralized not just at the protocol layer, but at the institutional layer.
The EF restructuring occurs against a stark economic backdrop:
The divergence is notable. Ethereum's settlement layer processes more transactions than ever. BlackRock's BUIDL fund, JPMorgan's deposit token infrastructure, and Broadridge's DLR repo system all run on Ethereum. Yet this demand has not translated into sustained price support for ETH.
The EF's 40% budget cut acknowledges the reality that ETH at $1,655 materially constrains a treasury denominated almost entirely in ETH. At 2025 highs, the foundation's ~102,400 ETH holdings would have been worth approximately $490M. At current prices, they are worth roughly $170M. The endowment model is not aspirational — it is a survival mechanism.
The Ethereum Foundation's restructuring is the most significant organizational overhaul in the nonprofit's 11-year history. It converts a broad-mandate research organization into a narrower, longer-duration entity — one that explicitly cedes applied research (ZK privacy), institutional outreach (Ethlabs), and conference scale (smaller Devcon) to preserve core protocol stewardship.
Whether this represents strategic discipline or managed decline depends on two variables: the trajectory of ETH's price (which determines the treasury's real purchasing power) and the capacity of spinoffs like Ethlabs to absorb the research mandates the EF is shedding. The EF has made the bet that a smaller, more opinionated foundation can outlast a larger one running a 15% annual drawdown on a depreciating asset.
The data on that wager will arrive over the next 12 to 18 months.