The Ethereum Foundation Is Shrinking on Purpose. Buterin Says That’s the Plan.

TLDR

• Vitalik Buterin published a 1,500-word post defending the Ethereum Foundation’s restructuring and long-term direction.
• The Foundation holds only 0.16% of all ETH, far below the 10–50% typically held by other blockchain foundations.
• At least eight senior Ethereum Foundation contributors have left or announced plans to leave in 2026, five in May alone.
• The Foundation will sell less ETH going forward, focusing on “longevity over breadth” and core protocol research.
• ETH was trading around $2,094–$2,100, more than 50% below its all-time high of nearly $5,000 reached in August 2025.

Vitalik Buterin posted a lengthy response on X on Sunday addressing months of criticism and staff departures at the Ethereum Foundation. He described the post as his personal view, not an official board statement.

The Ethereum Foundation has seen at least eight senior contributors leave or announce plans to leave in 2026. Five of those departures came in May. Former co-Executive Director Tomasz Stanczak stepped down, and interim co-Executive Director Bastian Aue is now overseeing the transition.

Buterin said the Foundation is not the “center of Ethereum” but rather “one node, with a defined purpose, alongside other nodes.” He stressed that its role has always been to support the Ethereum protocol, not to manage token price or marketing.

Ethereum Foundation’s Small ETH Holdings

One of Buterin’s key points was about the Foundation’s Ethereum holdings. He said the EF holds roughly 0.16% of all ETH in circulation. Most other blockchain foundations hold between 10% and 50% of their native token’s supply.

In May, the Foundation unstaked 21,270 ETH from the Lido liquid staking platform. Buterin said the organization plans to sell less ETH going forward and will stretch its remaining funds to focus on research.

He described this approach as choosing “longevity over breadth.” The Foundation will concentrate only on work that would not happen otherwise, specifically around what he called the “CROPS” properties: censorship resistance, open source, privacy, and security.

Staff Departures and Outside Pressure

Former Ethereum Foundation developer Dankrad Feist, who left his full-time role last year, proposed raising $1 billion for a separate Ethereum advocacy group that would be more economically tied to ETH as an asset.

Buterin acknowledged hearing from community members who felt the Foundation’s actions did not match its stated values around decentralization and privacy. He said this kind of criticism causes him “pain.”

Journalist Laura Shin argued that Ethereum’s troubles partly stem from not factoring in tokenomics with each protocol change, particularly since the March 2024 Dencun upgrade. That upgrade reduced fees for layer-2 transactions but also cut base layer revenue on the Ethereum network.

Technical Priorities

Buterin outlined three technical goals for Ethereum’s next phase. The first is using AI-assisted formal verification to produce provably bug-free code. The second is maintaining what he calls “available chain consensus,” which he says Ethereum already has. The third is reducing reliance on intermediaries through tools like FOCIL and the EF’s Kohaku wallet framework.

He also pushed back against the idea that Ethereum should compete primarily on transaction speed. “Being as fast and as scalable as possible, and only a small epsilon more decentralized than the others, is a route to mediocrity,” he wrote.

Buterin said his own power within the Foundation will continue to decrease, describing that outcome as something he wants. The Foundation’s board is currently expanding.

ETH was trading at around $2,100 as of Sunday afternoon, up roughly 2% over 24 hours, but still more than 50% below its all-time high of nearly $5,000 set in August 2025.

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