Ethereum Foundation Pushes Forward with Major Restructuring

Restructuring: This week, the Ethereum Foundation announced two major restructuring initiatives concerning the organization of its core R&D teams and its future treasury policy.

Strategic Goals: On Monday, the EF introduced “Protocol”, a reorganization of its R&D teams around three strategic goals: scaling the L1, scaling blobs (i.e., the L2s), and improving the UX.

New Leaders: Each of these goals will be pursued by a dedicated unit led by two Ethereum researchers. All teams will be advised by Dankrad Feist, one of the key architects of Ethereum’s rollup-centric scaling roadmap.

Treasury Policy Update: Alongside the organizational changes, the EF also introduced a revamped treasury strategy. First, the foundation plans to cap annual operating expenditure at 15% of its treasury while maintaining a 2.5-year reserve buffer. Over time, the EF plans to reduce this annual spend to just 5%, shifting towards a leaner, more sustainable operating model.

• Doubling down on DeFi: Following deployments in Aave and other lending protocols earlier this year, the EF has now formalized its strategy and plans to actively use DeFi to manage parts of its treasury. This includes staking ETH, supplying ETH on lending platforms, and borrowing stablecoins against its holdings.

Back to Cypherpunk: At the core of this new policy is the “Defipunk Framework” — a value-driven approach that defines which DeFi protocols the EF considers worthy of capital support. The EF intends to prioritize and concentrate deployments into protocols that adhere to a set of Ethereum-aligned principles like...

• Permissionlessness: Protocols should allow unrestricted interaction without KYC or whitelisting.
• Self-Custody: Users should maintain control over their assets by default.
• Open-Source: Contracts must be open-source under permissive licenses.
• Privacy: Emphasis on shielding transaction details and minimizing data collection.

Transparency Measures: To ensure credibility, the EF will publish quarterly internal performance updates and annual reports outlining its treasury allocations.

For years, the relationship between EF leadership and the DeFi ecosystem was, well, complicated — despite protocols like Aave, Sky, and Uniswap being integral to Ethereum’s ecosystem.

Now, however, the (new) leadership seems to recognize that instead of fighting its own strengths, it should double down on them.

And rather than merely preaching Ethereum alignment — often without clearly defining what that even means — the EF is now setting concrete rules and letting its $900 million ETH warchest do the talking by incentivizing builders who embed Ethereum’s core values into their protocols.

Hilmar is the co-founder of Gelato, a leading Rollup-as-a-Service (RaaS) provider, and Arrakis, a trustless market-making infrastructure protocol.

After years of drifting, Ethereum finally seems to be reorienting itself. Its current set of goals now aligns with what developers actually want the foundation to focus on: building scalable infrastructure for unstoppable, censorship-resistant applications that can support billions of users.

And this pivot matters, because as we saw in recent months, Ethereum’s position as the dominant smart contract platform is anything but guaranteed. Competing ecosystems like Solana have gained ground by moving faster, operating with cohesion, and executing more like startups — while Ethereum, by contrast, has been weighed down by its idealistic values.

Still, the fundamentals remain on Ethereum’s side. It continues to lead in terms of TVL, developer activity and cutting edge R&D like zero knowledge technology. And if it can now move with greater focus and urgency, Ethereum still has the best shot at becoming the trust layer for the global internet economy.