Ethereum Foundation Cuts 20% of Staff as It Splits Into Five Clusters

The Ethereum Foundation published its new structure on June 23, 2026, laying off 54 employees, roughly 20% of its staff, and dividing its remaining work into five named clusters. The cuts come with a 40% reduction in the foundation’s 2026 budget and conclude a months-long process tied to the March 2026 EF Mandate and the Treasury Management Policy the foundation set a year earlier.

The new clusters are designed around what the foundation calls CROPS properties: censorship resistance, capture resistance, openness, privacy, and security. They replace an organization that, until this month, still employed both of its co-executive directors. The June 23 announcement lands as a multi-org Ethereum coalition, including the new nonprofit R&D group Ethlabs unveiled the day before, the Ethereum Community Foundation, and Etherealize, has begun taking over coordination tasks the EF has historically carried alone.

The Five Clusters, In Plain Terms

The EF now describes its work as five clusters (Protocol, Access, User, Community, Institutional), plus an Operations cluster and a Management cluster that supports the rest. The Protocol cluster “carries the EF’s legacy and responsibility for ensuring that Ethereum delivers on its foundational promise of scaling self-sovereignty,” per the foundation’s June 23 post on the new structure. Its job is hardening the base layer: shipping forks safely, defending the transaction pipeline against toxic MEV and privileged orderflow, and turning long-horizon research such as post-quantum security, zkEVM, and L1 privacy into protocol changes.

The cluster’s stated objective is to keep the base protocol advancing without compromising on self-sovereignty guarantees. It “does not exist to make Ethereum more marketable or focused on short-term interests, or to make it easier to turn into another financial rail controlled by intermediaries.” The Access cluster is where the doctrine meets real users. Its guiding principle is the “zero option”: for every intermediated path, a credible intermediary-free path must exist and stay accessible.

In practice this means making core actions (reading the chain, transacting, proving, delegating, and exiting) work for individuals and, increasingly, for AI agents acting on their behalf, even when centralized services go down. The User cluster keeps EF decisions grounded in real user segments, personas, and educational material; the Community cluster owns how the foundation “shows up in the world,” both inside and outside the Ethereum ecosystem; and the Institutional cluster is where the EF engages financial institutions, governments, enterprises, universities, and nonprofits. The institutional brief is to prioritize “creating showcases of effective integration of Ethereum and cryptographic technologies that maximizes CROPS properties” rather than to make Ethereum easier for intermediaries to control.

The 54 Layoffs and a 40% Budget Cut

The 54 departing colleagues represent the visible cost of the restructure. The EF’s blog post calls the decisions “hard, but […] necessary,” arguing the foundation must be “resourced and organized in a way that allows us to focus on the critical work that only EF can, and therefore must, do in the coming years, without excessive disruption from short-term market movements.” Severance is the higher of one month’s pay per year of service or the locally mandated amount, plus ecosystem placement assistance and a small transition grant to cover career coaching and similar expenses. The package matches what the EF offered to contributors who left in earlier 2026 rounds.

The full-year financial picture is bigger. EF co-founder Vitalik Buterin said in a statement the same day that the foundation is “decreasing its budget by roughly 40%, shifting from its pre-2026 average of spending ~15% of its remaining funds,” with the long-term goal of running as an endowment-style organization at around 5% of assets per year. Per the 54-position cut and budget reduction, Buterin acknowledged the human cost: the cuts include talented engineers who worked on the Ethereum protocol for nearly a decade, and the leaner organization would not fully replace everything being eliminated.

• 54 employees laid off, roughly 20% of EF workforce
• ~40% cut to the 2026 budget
• ~15% annual spend rate today, ~5% target by 2030
• Severance: higher of one month per year of service or local mandate

The cuts land inside an 18-month leadership turnover. Both former co-executive directors are gone: Tomasz Stańczak, who joined in March 2025, stepped down at the end of February 2026; Hsiao-Wei Wang stepped down earlier this month, leaving Bastian Aue as interim co-executive director. The foundation has not announced permanent successors.

The Mandate That Made the Cuts Necessary

The reorganization does not arrive in a vacuum. On March 13, 2026, the foundation published the EF Mandate, a 38-page document it billed as “part constitution, part manifesto, and part guide.” At its center is CROPS: censorship resistance, capture resistance, openness, privacy, and security. The Mandate says these properties are “non-negotiable protocol guarantees” the foundation will not trade away “for financialization or institutional wins.” Per Bankless’s summary of the layered five-cluster breakdown, the foundation re-anchored itself to cypherpunk principles at the moment institutional capital is finally approaching crypto.

The Mandate also redefined the foundation’s role. Instead of positioning the EF as the driver of Ethereum adoption, it casts the foundation as steward of properties that make Ethereum worth defending. The shift is what justifies the narrower, leaner organization the new structure delivers. The foundation is now explicitly saying what it will not do: chase marketability, prioritize short-term interests, or hand control to intermediaries.

The framing is also what the foundation’s critics say is the problem. The CROPS doctrine, in that reading, is a values pitch rather than a sales pitch; allocator desks have moved on to ecosystems with faster shipping cycles. The foundation’s defenders, including Buterin in the same June 23 statement, counter that optimizing for raw speed is “a route to mediocrity” for a base layer. Both sides agree on one thing: the foundation’s posture has narrowed, and the question is whether that narrowing reads as discipline or as drift to the people who control institutional capital.

The Exodus That Preceded the Announcement

The June 23 restructure closes a six-month stretch in which eight senior contributors departed. The list includes both former co-executive directors; Tim Beiko, Ethereum’s hard-fork coordinator for years; Carl Beek, Julian Ma, and Barnabé Monnot, all from the Protocol cluster; ecosystem support lead Trent Van Epps; protocol researcher Alex Stokes, now on sabbatical; and Josh Stark, a board co-steward for seven years who co-chaired the Trillion Dollar Security initiative. Most announced in April or May. Dankrad Feist, a senior researcher, had already moved to a part-time advisor role in October 2025 to join Tempo, the Layer 1 backed by Stripe and Paradigm, while staying on as an EF advisor in parallel.

Several departures clustered around specific ideological flashpoints. Van Epps publicly described the foundation leadership’s association with the Milady NFT collection as “baffling and sad.” Cryptopolitan reported that all EF members had been asked to sign the Mandate document or be fired effective immediately, a claim the foundation has neither confirmed nor denied on the record. No departing contributor has publicly cited the Mandate as a stated reason.

The contested reading of the restructure runs from outside the foundation. The same six-month stretch that produced the EF’s narrower CROPS-first posture also saw Stripe and Paradigm’s Tempo chain recruit Feist, per the spring 2026 reshuffle and Mandate analysis. The CROPS framework is a values pitch, not a sales pitch. Whether institutional capital reads the foundation’s narrower, slower posture as discipline or as drift depends on what the next two quarters of treasury management and communication look like.

Internal links: Eight departures test Ethereum’s institutional story lays out the timing and the parallel foundation that has begun raising ETH from individual donors on a stricter set of funding criteria.

Who Fills the Gap the EF Is Leaving

The Ethereum Foundation spotlighted this dynamic in a June 22 thread listing “organizations that have come together over the last year, meaningfully strengthening the resilience and capacity of the ecosystem.” The list included Ethlabs, an independent nonprofit R&D group unveiled the day before; the Ethereum Applications Guild; and the Ethereum Economic Zone, alongside longer-running efforts like the Ethereum Community Foundation and Etherealize. Bankless called the resulting arrangement “a loose and multiplicitous Ethereum coalition […] forming to an extent we haven’t see before” and framed the broader setup as broadly bullish for Ethereum.

The Ethereum Community Foundation is the most direct parallel structure, launched in mid-2025 with a narrower, stricter funding mandate than the EF’s grants program. It funds only immutable, tokenless, ETH-burning projects, with adoption patterns that route transaction throughput into EIP-1559 base-fee burns. The body has already raised millions of dollars in ETH from individual donors. Tempo, the Stripe- and Paradigm-backed L1 that recruited Feist, is the alternative-destination case study: it now hosts at least one senior researcher who left the EF for a VC-funded competing chain.

What Changes for the Fork Pipeline

The narrow CROPS focus shows up in what the foundation is shipping next. Glamsterdam, the next hard fork, has a tighter scope than initially planned: EIP-7732 (ePBS, enshrining proposer-builder separation), EIP-7928 (block-level access lists), and EIP-8037 gas repricing with a 200M gas-limit target. FOCIL and native account abstraction, both user-experience items on earlier Glamsterdam drafts, have been pushed to Hegotá, the fork after next. Multi-client devnet testing has been live since May 2026, with mainnet targeting Q3 2026.

The PSE wind-down is the most visible pipeline shift. The Privacy and Scaling Explorations team, a flagship EF pod that incubated much of the Ethereum zero-knowledge research, is dissolving as a standalone unit. Vitalik Buterin’s framing is that this is a graduation: research insights are moving into direct ZK proof implementations, including the Kohaku privacy wallet, which the EF is keeping as a flagship program. The other pipeline change is more philosophical. Buterin said the foundation is “moving away from client diversity as a pure redundancy strategy and more toward AI-assisted formal verification as a new primary security paradigm.” That shift opens client teams to specialize while raising an open question about whether AI-assisted verification can replace multi-client redundancy at the consensus layer.

Buterin’s longer-term view is more austere. He advocated for what he called a “soft lean-and-done” ossification of Ethereum once the current Strawmap roadmap is complete. In plain language, the foundation’s posture is trending toward Bitcoin’s: mostly security fixes, fewer major new features. Whether the rest of the Ethereum ecosystem, especially the new institutional layer, agrees with that destination will define the foundation’s next chapter.

The protocol cluster exists to make sure the core protocol continues to advance without compromising on self-sovereignty guarantees. It does not exist to make Ethereum more marketable or focused on short-term interests, or to make it easier to turn into another financial rail controlled by intermediaries.

Frequently Asked Questions

What are CROPS, and why does the EF keep mentioning them?

CROPS stands for Censorship Resistance, Capture Resistance, Openness (open source), Privacy, and Security. The acronym was set out in the EF Mandate published March 13, 2026, and the protocol cluster description in the June 23 restructure post defines each as a “non-negotiable protocol guarantee” the foundation says it will not trade away for short-term market or institutional wins.

When did the Ethereum Foundation announce the new structure?

The EF published the restructure on its blog on June 23, 2026. The same day, Vitalik Buterin posted his own framing of the cuts, including the 40% budget reduction and the shift toward a 5%-of-assets annual spending target by 2030.

Will the Glamsterdam fork still ship on time?

The EF’s May 2026 protocol cluster update set Glamsterdam’s mainnet target at Q3 2026, with multi-client devnet testing live as of that update. The fork’s scope has narrowed from earlier drafts: FOCIL and native account abstraction have been pushed to Hegotá, the upgrade after Glamsterdam.

How much of its ETH treasury will the EF spend each year?

The foundation currently spends roughly 15% of its remaining treasury per year, per the June 2025 Treasury Management Policy and Buterin’s June 23 statement. The target by 2030 is around 5% of total assets per year, putting the EF on an endowment-style runway designed to let it operate indefinitely without drawing down reserves.

What is the Ethereum Community Foundation, and is it competing with the EF?

The Ethereum Community Foundation was launched in mid-2025 with a narrower, stricter funding mandate than the EF’s grants program: it funds only immutable, tokenless, ETH-burning projects, with adoption patterns that route throughput into EIP-1559 base-fee burns. The EF has not framed it as a competitor; Bankless describes both as part of a broader Ethereum coalition now coordinating work the EF used to handle alone.