CryptoSlate
The Ethereum Foundation has cut roughly 20% of its workforce and slashed its budget by about 40% as part of a broad reorganization, even as the blockchain it helps steward records its highest-ever user activity and deeper participation from BlackRock, JPMorgan, Franklin Templeton and Fidelity. On June 23, the nonprofit said it dismissed 54 employees following a months-long review of its structure, spending and long-term responsibilities. ETH, meanwhile, is down more than 43% year-to-date and trading near $1,670.
Why it matters
The move exposes a widening gap between Ethereum the network and ETH the asset. Token Terminal data shows monthly active users hit 13.2 million in Q1 2026, up 53.5% quarter-over-quarter and 85.9% year-over-year, while transaction count climbed 38% to 200.4 million and throughput reached a record 25.78 transactions per second. Tokenized assets on the network stood at $203.4 billion, including $178.9 billion in stablecoins, and tokenized funds grew 4.9% on the quarter.
Yet those gains have not translated into demand for ETH. Layer-1 transaction fees fell nearly 48% quarter-over-quarter to $39.9 million, an 81.9% drop from a year earlier. Total value locked slipped 11% to $316.2 billion, and Ethereum's fully diluted market cap contracted 30.3% to $290 billion. US-listed spot ETH ETFs recorded seven consecutive weeks of outflows totaling almost $1 billion, evidence that Wall Street is happy to build on Ethereum without holding the token.
Market impact
Vitalik Buterin said the reorganization is intended to insulate the Foundation from short-term market cycles, with the entity targeting an endowment-style spending rate of roughly 5% of assets annually after 2030, down from about 15% historically. Interim director Bastian Aue outlined a narrower, more defensive mandate: stronger transaction-inclusion guarantees, enshrined proposer-builder separation, encrypted mempools, and a hardened lean-and-done development model that Buterin said should mirror Bitcoin's restraint rather than sprawling software projects. Remaining staff have been split into five clusters across protocol, access, user, community and institutional layers, and the Foundation plans to move internal compensation into ETH and native stablecoins. Devcon is being scaled back, the multi-client model is being wound down in favor of AI-assisted formal verification, and the Privacy and Scaling Explorations unit is being folded into core protocol work.
Frequently asked questions
-
How much of the Ethereum Foundation's staff was cut?
Roughly 20%, or 54 employees, dismissed on June 23 following a months-long internal review of the nonprofit's structure, spending and long-term responsibilities.
-
Why is the Ethereum Foundation cutting staff even as network usage hits records?
Vitalik Buterin said the reorganization is meant to insulate the Foundation from short-term market cycles. The network hit record throughput and tokenization milestones in Q1 2026, but ETH is down more than 43% YTD and base-layer fees collapsed.
-
How are spot Ethereum ETFs performing?
US-listed spot ETH ETFs recorded seven consecutive weeks of outflows totaling nearly $1 billion, signaling weak direct investor demand for the token even as institutions build on the network's infrastructure.
-
What is the Foundation's new endowment-style spending target?
The Foundation is targeting roughly 5% of remaining assets spent annually after 2030, down from an average of about 15% per year historically, in order to preserve capital across market cycles.
-
What are the Foundation's top technical priorities after the reorganization?
MEV mitigation via Forward Inclusion Lists, enshrined proposer-builder separation and encrypted mempools, plus programmable privacy. The Foundation is also winding down the multi-client model in favor of AI-assisted formal verification.
Crypto News
Lookonchain
Crypto Capital Venture
TheBlock
WuBlockchain
CoinDesk