Ethereum Foundation Overhauls Operations: New Treasury Policy and R&D Restructuring Announced

The Ethereum Foundation has announced a significant overhaul of its operations, including a new treasury policy and a restructuring of its research and development team. These changes aim to enhance financial transparency, ensure long-term sustainability, and refocus efforts on critical protocol design challenges, addressing community concerns and positioning Ethereum for future growth.

Key Takeaways

• The Ethereum Foundation (EF) has implemented a new treasury policy, capping annual operational expenses at 15% of its treasury and maintaining a 2.5-year cash buffer.

• The EF has restructured its research and development division, leading to some staff layoffs, to prioritize core protocol design challenges.

• The foundation will increase transparency by publishing quarterly financial reports and engaging more with decentralized finance (DeFi) protocols.

Ethereum Foundation Unveils New Treasury Policy

The Ethereum Foundation has introduced a new treasury policy designed to bolster its financial stability and transparency. The policy mandates that annual operational expenses (opex) will not exceed 15% of its total treasury, with a goal to reduce this to a 5% baseline over the next five years. A 2.5-year cash buffer will be maintained at all times. This strategic move reflects the EF's belief that 2025-2026 will be pivotal years for Ethereum, necessitating a focused allocation of resources.

To enhance transparency, the EF will publish quarterly financial reports to its board and an annual public report detailing asset holdings, investment performance, and significant developments. This comes after past criticism regarding the foundation's opaque operations and recent Ether (ETH) sales.

The foundation also plans to diversify its holdings into fiat currency and engage more with permissionless DeFi protocols to generate returns on treasury assets. This new approach marks a departure from its historical stance of maintaining strict neutrality, aiming to support the ecosystem while strengthening its financial position.

R&D Restructuring and Staff Layoffs

In parallel with the treasury policy changes, the Ethereum Foundation has restructured its research and development team, now simply called "Protocol." This restructuring involved laying off some staff members, though the exact number was not disclosed. The move is part of a broader effort to refocus on critical protocol design challenges and improve the efficiency of core development efforts.

The restructured Protocol team will concentrate on three main priorities:

• Scaling Ethereum's base layer

• Expanding blobspace for data availability

• Improving user experience

Hsiao-Wei Weng, co-executive director at the EF, stated that these changes are a departure from previous working methods but are intended to create a more responsive and effective path forward. The foundation hopes that affected individuals will continue to contribute to the broader Ethereum ecosystem.

Addressing Community Concerns and Future Outlook

These significant organizational changes come amid ongoing criticism regarding the Ethereum Foundation's management and strategic direction. Community members have voiced concerns about the blockchain's ability to maintain its leadership position if key technical hurdles are not addressed. The foundation's proactive measures, including leadership changes and now these policy and structural reforms, aim to address these concerns directly.

The new policies and restructuring are intended to ensure the EF's long-term agency, sustainability, and legitimacy, positioning Ethereum for continued innovation and growth in a competitive blockchain landscape.

Sources

• Ethereum Foundation Lays Off Some Staff Amid R&D Restructuring, CoinDesk.

• Ethereum Foundation rolls out new treasury policy, Cointelegraph.

• Ethereum Foundation Unveils New Treasury Policy With 15% Opex Cap, CoinDesk.