Layla Zulfa
Today marks a pivotal moment for the Ethereum Foundation (EF) as it concludes a months-long, comprehensive reorganization effort, resulting in a significant reshaping of its operational structure and a reduction of its workforce by 54 individuals, approximately 20% of its total staff. This strategic realignment is explicitly driven by the implementation of the EF’s newly articulated Mandate and its stringent Treasury Management Policy, both designed to optimize resource allocation and reinforce the Foundation’s core mission in a maturing ecosystem.
Background and Context: The Ethereum Foundation’s Evolving Role
The Ethereum Foundation, a non-profit organization, has been at the heart of the Ethereum ecosystem since its inception. Founded in 2014, its primary role has evolved from initially kickstarting the development of the Ethereum blockchain to stewarding its ongoing progress, supporting core research, and fostering a robust, decentralized community. Unlike a traditional corporate entity, the EF’s influence is primarily through grants, research initiatives, and coordination, rather than direct control over the decentralized network itself. Its mission is to ensure Ethereum remains a public good, resistant to censorship and capture, and committed to its foundational principles of openness, privacy, and security.
Over the years, as Ethereum transitioned from its proof-of-work consensus mechanism to proof-of-stake with "The Merge," and as its ecosystem burgeoned into a multi-trillion-dollar industry at its peak, the EF’s responsibilities grew in complexity and scale. The organization accumulated a diverse team of researchers, developers, community managers, and operational staff, reflecting the multifaceted needs of a global, rapidly evolving technological frontier. However, the decentralized nature of Ethereum also means that innovation and development increasingly occur outside the direct purview of the EF, necessitating a strategic recalibration of its own internal focus.
Strategic Imperatives: The Mandate and Treasury Policy
The recent reorganization is a direct consequence of two foundational documents: the EF Mandate and the Treasury Management Policy, the latter having been published on June 4, 2025. While specific details of these documents are extensive, their overarching intent is clear: to streamline the EF’s operations, enhance its long-term financial sustainability, and sharpen its strategic focus on critical tasks that are either underserved by the broader ecosystem or require the EF’s unique position as a neutral steward.
The Mandate likely defines the EF’s core mission, clarifying its boundaries and specifying the types of activities it should prioritize. This includes a strong emphasis on scaling self-sovereignty – empowering individuals with control over their digital lives and assets – and safeguarding Ethereum’s fundamental properties against external pressures or internal compromises. This commitment to self-sovereignty, often referred to as CROPS (Censorship Resistance, Openness, Privacy, Security), underpins much of the EF’s strategic direction.
The Treasury Management Policy, on the other hand, signals a move towards greater financial prudence and resilience. In the volatile cryptocurrency market, organizations like the EF, which primarily hold assets in ETH, are susceptible to significant fluctuations in their operational budgets. By establishing clear guidelines for treasury management, the EF aims to insulate its critical work from short-term market downturns, ensuring consistent funding for long-horizon research and development, irrespective of market cycles. This proactive approach to financial stability is crucial for maintaining the EF’s independence and its capacity to act as a reliable anchor for the ecosystem.
The Restructuring: A New Operational Framework
The outcome of this months-long process is a new organizational blueprint for the EF, structured around five distinct "layers" or clusters of work, complemented by dedicated operational and management clusters. This new framework is designed to provide tailored approaches for different domains, each with specific accountabilities and internal structures. The five core clusters are:
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Protocol Layer: This cluster embodies the EF’s core legacy, focusing on the foundational integrity and scalability of the Ethereum protocol itself. Its primary objective is to harden and scale the protocol while uncompromisingly enforcing its core properties: censorship and capture resistance, open source principles, privacy, and security. It avoids initiatives that would make Ethereum more "marketable" or susceptible to short-term financial interests, instead prioritizing long-term resilience. This involves safely shipping protocol upgrades (forks), reducing unnecessary complexity, minimizing trusted dependencies, and defending the transaction pipeline against issues like "toxic MEV" (Maximal Extractable Value – profit extracted by reordering, censoring, or inserting transactions) and "privileged orderflow." The cluster also accelerates long-horizon research into areas like post-quantum security (protecting against future quantum computer attacks), zkEVM (zero-knowledge Ethereum Virtual Machine – a technology for scaling Ethereum with privacy), and Layer 1 (L1) privacy, aiming to integrate these into protocol changes that enhance self-sovereignty at scale.
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Access Layer: This layer is dedicated to ensuring that the self-sovereignty promised by Ethereum is practically accessible and usable by individuals. It focuses on making key actions – reading the blockchain, transacting, proving ownership, delegating authority, and exiting the system – legible and survivable for users. This includes enabling users to access current and historical data without relying on unverifiable intermediaries, transacting privately and censorship-free, and maintaining control over their intentions even when delegating tasks to automated agents. The core principle here is the "zero option": for every intermediated path, a credible, intermediary-free alternative must exist and remain accessible, identifying areas where stronger CROPS properties can be applied or where credible decentralized alternatives are necessary due to economic incentives favoring centralized aggregation.
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User Layer: Grounding the EF’s work in real-world utility, this cluster focuses on understanding and serving the diverse users and organizations who have vital interests in self-sovereign use of Ethereum. It helps the EF identify crucial capabilities, serious failure modes, and acceptable trade-offs. Its work encompasses user segments, personas, educational materials, use-case research, and impact evaluation. This cluster ensures that decisions made by the Protocol and Access Layers are informed by genuine user needs, practical constraints, and measurable improvements in self-sovereignty, without the EF becoming a product development studio.
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Community Layer: This cluster manages the EF’s external presence, both within and beyond the Ethereum ecosystem. It aims to clearly articulate what the EF stands for, differentiating it from "zero-sum financial crypto" (speculative, profit-driven ventures), "corpo-compromised crypto" (projects beholden to corporate interests), and non-profits vulnerable to "laundering geopolitical interests." The EF emphasizes its commitment to maximizing community value through independence from such entanglements. Additionally, this layer builds relationships with natural allies outside crypto, including free and open-source software, secure hardware development, privacy and cryptography research, civil liberty advocacy, and public-interest technology, fostering fruitful collaborations that align with Ethereum’s values.
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Institutional Layer: This cluster engages with traditional institutions—financial entities, non-financial enterprises, governments, universities, and other non-profit groups—that shape institutionally intermediated paths for end-users to interact with Ethereum. The goal is to create showcases of effective integration that maximize CROPS properties and offer strong guarantees to both institutions and users. This includes ensuring fair and correct execution, data portability, privacy protection, authenticity verification, and improved detection/prevention of misbehavior. The EF believes that many institutions will find their incentives align with strengthening self-sovereignty while meeting their operational needs. Beyond direct engagement, the cluster develops best practices, standards, reference architectures, and educational materials for institutional adoption. It also works with academics and advocacy organizations to ensure accurate understanding of Ethereum and to track/respond to policy and regulatory developments that could impact Ethereum’s commitment to self-sovereignty and its core principles.
Workforce Adjustments and Support for Departing Employees
The strategic restructuring necessitated difficult decisions regarding the EF’s workforce. The departure of 54 colleagues, representing approximately 20% of the Foundation, reflects a deliberate effort to create a leaner, more focused organization. This reduction is framed as a necessary step to concentrate resources on the unique, critical work that only the EF can undertake, while also mitigating disruption from short-term market volatility.
Acknowledging the personal impact of these decisions, the EF has committed to providing comprehensive support to its departing colleagues. This support package includes severance pay, calculated as the higher of one month’s salary per year worked at the EF or the amount legally mandated by the individual’s jurisdiction. This policy aligns with severance offered in previous, smaller-scale departures. In addition to financial severance, the EF is offering transition support, which includes assistance in finding new roles within the broader Ethereum ecosystem and a "small transition grant" specifically earmarked for expenses such as career coaching and other professional development needs. The Foundation expressed profound gratitude for the talent, dedication, and time contributed by these individuals, expressing hope for their continued contributions to the Ethereum ecosystem in new capacities.
Implications for the Ethereum Ecosystem and Beyond
The Ethereum Foundation’s major restructuring carries significant implications for the entire ecosystem and its future trajectory.
Enhanced Focus and Efficiency: A leaner EF, with clearly defined layered responsibilities, is poised to operate with greater agility and precision. By focusing on core public goods, foundational research, and strategic initiatives that reinforce self-sovereignty, the Foundation can avoid duplicating efforts already undertaken by the vast commercial and open-source segments of the Ethereum ecosystem. This sharpened focus could accelerate progress in critical areas like protocol hardening, advanced scaling solutions, and user-centric access mechanisms, ensuring Ethereum remains robust and relevant in the long term.
Impact on Ethereum’s Development Trajectory: The explicit emphasis on "self-sovereignty" across all layers signals a reinforcing of Ethereum’s ideological roots. The Protocol Layer’s mandate to defend against "toxic MEV" and prioritize "post-quantum security, zkEVM, and L1 privacy" indicates a strong commitment to long-horizon, fundamental research that enhances the network’s resilience and privacy features. The Access and User Layers will likely drive more intuitive and secure ways for individuals to interact with Ethereum, fostering broader adoption without compromising core principles. Meanwhile, the Institutional Layer’s work aims to guide traditional entities toward integrations that uphold, rather than dilute, the network’s decentralized values. This cohesive strategy, driven by the new structure, could lead to a more principled and user-empowering evolution of the Ethereum network.
Talent Redistribution within the Ecosystem: While layoffs are inherently challenging, the departure of 54 skilled individuals from the EF represents a significant injection of experienced talent into the broader Ethereum ecosystem. These former colleagues, deeply familiar with Ethereum’s technical landscape and ethos, are likely to find new homes in other projects, startups, or research initiatives. This redistribution of talent could invigorate other parts of the ecosystem, fostering innovation and strengthening the decentralized development landscape outside the EF’s direct organizational structure. The EF’s proactive support for their transition underscores a desire for this talent to remain engaged and productive within the Ethereum community.
Community Reception and Future Engagement: The community’s reception to such a significant organizational change will be multifaceted. While there may be initial concern for the departing individuals, the transparency regarding the strategic rationale – driven by a clear Mandate and Treasury Policy – is likely to be appreciated. The EF’s commitment to sharing more details about its evolving work and how the ecosystem can engage with the new structure in the coming weeks and months will be crucial for maintaining trust and fostering collaboration. This restructuring positions the EF as a more strategically aligned and financially resilient steward, capable of navigating the complexities of a maturing global blockchain.
Conclusion
The Ethereum Foundation’s comprehensive reorganization marks a significant inflection point, signaling a strategic evolution from a broad-based support organization to a more focused and agile steward of Ethereum’s foundational principles. By implementing a new layered structure and streamlining its workforce, the EF aims to concentrate its resources on critical, often public-good-oriented tasks that are essential for safeguarding Ethereum’s self-sovereign promise. This leaner, more strategically aligned Foundation is poised to continue playing a vital role in the ongoing development and long-term resilience of the Ethereum ecosystem, ensuring its core values remain at the forefront of its future advancements.
