Ethereum Foundation Cuts 20% Staff, 40% Budget; Ethlabs Launches, ETH Near $1,670

Ethereum News

The Ethereum Foundation confirmed on June 23 that it is parting ways with 54 employees, roughly 20% of its workforce, as it concludes a months-long restructuring aimed at becoming leaner and more focused. The reorganization, built around the organization’s March Mandate and a new treasury policy, splits work into five domain clusters covering the protocol, access, user, community and institutional layers, plus separate operations and management teams. Most departing staff are expected to keep contributing to the altcoin ecosystem from outside the Foundation. The cuts follow a steady run of senior exits, including co-Executive Director Hsiao-Wei Wang, who left earlier this month after a turbulent year of leadership turnover.

On the same day, co-founder Vitalik Buterin disclosed that the Foundation will reduce its budget by roughly 40% this year, framing the decision as a deliberate trade rather than a simple efficiency drive. He outlined a shift toward an endowment-style model, lowering annual spending from about 15% of treasury holdings to a long-term target near 5% by 2030. To sell less ETH, the Foundation intends to lean on staking and DeFi yield instead of principal. Buterin acknowledged concrete losses, including a wind-down of the Privacy and Scaling Explorations unit, a smaller Devcon conference, and a narrower set of projects beyond the core protocol roadmap.

Each of the five clusters carries distinct accountability and internal structure. The protocol layer focuses on scaling and hardening mainnet while researching post-quantum security, zkEVM and L1 privacy, preserving the network’s censorship-resistance, open-source, privacy and security values. The access layer adopts a so-called zero-option principle, ensuring users can read, transact, prove and exit without relying on unverifiable intermediaries. The institutional layer supports adoption by banks, corporations, governments and universities while tracking policy and regulation. Privacy-focused work, including efforts comparable to zero-knowledge systems like Aztec Network, remains central to the protocol team’s mandate as the Foundation sharpens its priorities.

The restructuring landed one day after five former Foundation researchers unveiled Ethlabs, a nonprofit research-and-development organization targeting institutional adoption. Ansgar Dietrichs, Barnabé Monnot, Caspar Schwarz-Schilling, Josh Rudolf and Julian Ma, contributors across finality, scaling, data availability and protocol economics, founded the lab with backing from BitMine Immersion Technologies, SharpLink and co-founder Joseph Lubin, alongside Anchorage Digital, Octant and SNZ. Ethlabs aims to position Ethereum as the settlement layer of the global economy, prioritizing faster settlement, native issuance, cross-chain interoperability and research into ETH’s monetary properties to support stablecoins, tokenized real-world assets and autonomous AI-driven commerce.

The dual announcements followed a sharp governance dispute over how Ethereum funds core work. Former contributor Trenton Van Epps warned of a slow-burning funding crisis within three to nine months, estimating that more than ten client, research and coordination teams cost roughly $30 million a year as legacy support programs expire. Kleros co-founder Clément Lesaege proposed a protocol-level Validator Redirected Revenue mechanism that could divert up to 10% of validator rewards, potentially around 70,000 ETH or about $120 million annually, toward ecosystem funding. Critics warned of cartel-like incentives and a risky precedent, framing Ethlabs as a more neutral, privately backed alternative.

Corporate treasuries continued accumulating despite the turmoil. BitMine expanded its position past 5.67 million ETH, cementing its status as one of the largest public holders of the asset. Chairman Tom Lee dismissed crisis narratives, arguing private backers and stakers will readily fill any gap, and contended that Ethereum sits at the start of an institutional and AI-agent adoption wave requiring far greater investment in research and talent. The aggressive buying contrasts with the funding anxiety dominating developer forums, underscoring a widening split between long-term institutional conviction and near-term concerns over how protocol development sustains itself.

According to COINOTAG’s proprietary 42-indicator composite S/R scoring engine, the $1,615 support carries a 68/100 score, driven by the confluence of a Fibonacci 0.114 retracement, the S1 pivot and a MACD cross, with deeper backing at $1,505 rated 64/100 from Donchian and ATR lower bands. On the upside, the $1,708 resistance scores 66/100 from LVN, BB Middle and SMA 20 sources, followed by $1,759 at 64/100. Derivatives show a slightly negative funding rate of -0.0003% and a long/short account ratio of 3.37, with 77.1% positioned long against $6.27 billion in open interest, a crowded setup. With RSI at 36.82 and a Fear & Greed reading of 17 (Extreme Fear), reclaiming $1,709 favors bulls, while a daily close below $1,505 would invalidate the recovery thesis.