Key takeaways:
- Ethereum Foundation has laid off 54 people (approx. 20% of the team) and plans to reduce its budget by ~40%, switching to an endowment model with lower expenses in the future.
- The cuts are not only financial, but also strategic – the organization wants to focus on key goals and operate in the long term without reducing resources.
- An independent non-profit organization, Etherlabs, is launched with the goal of developing Ethereum as a global settlement layer and building infrastructure for the future economy based on ETH.
The Ethereum Foundation announced the elimination of as many as 54 positions on Tuesday. This translates into approximately 20% of employees. This is the result of many months of reorganization. In addition, Etherlabs, a non-profit organization whose main goal is to make Ethereum great, is starting.
The Ethereum Foundation is slowing down
The Ethereum Foundation, which is behind the largest DeFi network, announced a summary of its reorganization. Unfortunately, for some of its staff, this means the end of cooperation with this entity.
We emerge from this process with the structure, activities, and people necessary to accomplish the critical tasks before us, but also with 54 fewer contributors, representing approximately 20% of EF, many of whom will be looking for ways to contribute to Ethereum development beyond EF in the coming weeks
– the Foundation wrote in a post on its blog.
Ethereum co-founder Vitalik Buterin claims that the cuts were necessary, but not only for financial but also strategic reasons. Not only will the number of employees decrease, but also the total budget will decrease: by approximately 40%. This is part of the transition to an operating model based on an endowment fund. The current annual spending rate of around 15% of remaining funds is expected to decline to around 5% per year after 2030. This will allow the Ethereum authorities to operate indefinitely without depleting the treasury.
Start Etherlabs
Our mission is to make Ethereum the settlement layer of the global economy. (…) Ethereum is uniquely positioned to become that shared base layer, the neutral foundation on which users, institutions and agents can transact without an intermediary
– explain the founders.
We work with users, applications, wallets, L2, infrastructure teams, institutions, ETH holders, core developers and researchers and then turn what they really need into protocol work, shared standards, infrastructure and delivered products
– they add.
Ethlabs is independent, so it is not directly related to the Foundation. However, the Ethereum network is a “shared project” for both. Behind the new entity are people who “have devoted themselves to Ethereum research and development for most of the last decade.”
The team encourages you to contact us: join@ethlabs.org.
The ETH price, of course, did not react because the announcement coincided with declines in traditional markets. Why I think it’s important: Ethlabs is intended to be what the Ethereum Foundation was intended to become in its final vision. For the first time since the creation of Ethereum, an organization was established that brings together the most important people in the cryptocurrency world to jointly develop a strong future not only for Ethereum, but also… ETH as a cryptocurrency
– he adds.
Currently, 1 ETH costs only USD 1,670, which means the same price as yesterday, but also a 20% drop in 30 days.
