The Ethereum Foundation on June 23 eliminated 54 positions and wound down Privacy and Scaling Explorations, its dedicated zero-knowledge research group, in the broadest structural overhaul in the nonprofit's history.
The cuts amount to roughly 20% of EF's workforce, alongside a 40% reduction to the 2026 operating budget. EF is moving toward an endowment model, with annual spending set to fall from roughly 15% of treasury assets to 5% by 2030. That target is closer to foundations designed to operate indefinitely on investment returns instead of drawing down capital.
ZK lab closure moves Ethereum research outside EF
PSE's closure is the clearest operational change in the package. The unit was EF's main internal lab for zero-knowledge proof research, the cryptographic work behind zkEVM development, L1 privacy tools, and scaling. Winding it down ends EF's centralized in-house R&D role in that area.
The remaining work is being reorganized into five domain clusters: Protocol, which owns post-quantum security, zkEVM, and L1 privacy; Access, which covers on-chain self-sovereignty for users and AI agents; User, which handles empirical usage research; Community, which owns public positioning; and Institutional, which manages work with financial institutions, enterprises, and governments.
The Foundation also plans smaller, less costly Devcon events and a move toward specialized client teams using AI-assisted formal verification.
Budget cuts follow 18 months of leadership turnover
The announcement caps an 18-month transformation. Nine senior figures have departed since January 2026, including both co-executive directors: Tomasz Stańczak in February and Hsiao-Wei Wang, whose resignation effective June 18 was reported earlier this week.
Board member Bastian Aue is taking on expanded leadership duties. Vitalik Buterin, who published the restructuring announcement on the EF blog, acknowledged the cost directly: "I respect my EF colleagues far too much to pretend that there was not much that is lost."
ETHLabs moves to pick up Ethereum acceleration work
The ecosystem's counter-move came alongside the announcement. Ethereum co-founder Joseph Lubin, treasury companies Bitmine and SharpLink, and more than 50 ecosystem contributors announced ETHLabs, a nonprofit R&D initiative focused on Ethereum's technical roadmap and institutional adoption.
Participants include Uniswap, Base, Optimism, Eigen Labs, Flashbots, Polygon, Coinbase, Nethermind, ENS, and L2Beat. ETHLabs says its goal is to position Ethereum as "the settlement layer of the global economy" through a "multi-node future," with development spread across many organizations instead of concentrated inside one foundation.