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

The Ethereum Foundation (EF) has announced a significant restructuring, including staff layoffs and a new treasury policy. These changes aim to refocus research and development efforts on core protocol challenges and ensure the long-term financial sustainability of the organization, particularly as 2025-2026 are anticipated to be pivotal years for the Ethereum ecosystem.

Ethereum Foundation Undergoes Major Restructuring

The Ethereum Foundation has initiated a comprehensive internal restructuring, rebranding its Protocol Research & Development (PR&D) team simply as "Protocol." This leaner organization will concentrate on three strategic goals:

• Scaling Ethereum's base layer (L1)

• Expanding blobspace for rollups

• Improving user experience (UX)

As part of this reorganization, some members of the PR&D team have been laid off. While the exact number of affected individuals was not disclosed, the EF stated that the move creates a more united and focused team. This restructuring follows earlier leadership changes in January and April, which saw the appointment of new co-executive directors, Hsiao-Wei Wang and Tomasz Stańczak, and a clearer division between board and executive functions.

New Treasury Policy for Long-Term Sustainability

In conjunction with the R&D restructuring, the Ethereum Foundation has unveiled a new, more transparent treasury policy. This policy aims to align short-term operations with long-term strategic goals and ensure the foundation's financial resilience, especially during potential market downturns or pivotal periods for the ecosystem.

Key aspects of the new treasury policy include:

• Operational Cost Cap: Annual operating expenses will be capped at 15% of the EF's treasury.

• Runway Target: The foundation aims to maintain a 2.5-year cash runway.

• Transparency: Quarterly and annual reports will be published detailing asset holdings, investment performance, and significant developments.

• DeFi Engagement: The EF plans to engage more actively with permissionless DeFi protocols to earn returns on treasury assets, having already deployed 45,000 ETH to platforms like Aave, Compound, and Spark.

• Asset Allocation: As of October 31, 2024, the EF's treasury totaled approximately $970.2 million, with over 81% held in ETH.

This new policy addresses past community concerns regarding the EF's ETH sales and aims to foster greater trust and accountability. Hsiao-Wei Wang emphasized that the next 18 months will be crucial for the foundation to deploy resources deliberately and support the ecosystem effectively.

Sources

• Ethereum Foundation restructures, rebrands Protocol team, Cointelegraph.

• Ethereum Foundation expects 2025-26 to be ‘pivotal’ for the ecosystem as it reforms its treasury management |The Block, The Block.

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

• Ethereum Foundation rolls out new treasury policy, Cointelegraph.

• Ethereum Foundation Releases Treasury Policy to Prioritise Operational Expenses ⋆ ZyCrypto, ZyCrypto.