Ethereum Foundation Reshapes Future with Restructuring and New Treasury Policy

The Ethereum Foundation (EF) has announced a significant restructuring, including staff layoffs and a rebranding of its core development team. This strategic overhaul aims to enhance focus on critical protocol challenges and improve operational efficiency. Concurrently, the EF unveiled a new treasury policy designed to bolster financial stability and transparency, reflecting a pivotal period for Ethereum's future.

Key Takeaways

• The Ethereum Foundation has undergone a major restructuring, including staff layoffs and a rebranding of its core R&D team to "Protocol.

• The restructuring focuses on three key areas: scaling Ethereum's base layer, expanding blobspace for rollups, and improving user experience.

• A new treasury policy has been introduced, capping operational expenses at 15% of the treasury annually and aiming for a 2.5-year cash runway.

• The EF will increase transparency with regular financial reports and plans to engage more with DeFi protocols to generate returns on its assets.

Ethereum Foundation Undergoes Major Restructuring

The Ethereum Foundation (EF) has initiated a significant internal restructuring, including the rebranding of its Protocol Research & Development (PR&D) team to simply "Protocol." This move is part of a broader effort to streamline operations and sharpen the focus on core development priorities. While the EF did not specify the exact number of individuals affected, some staff members from the PR&D team have been laid off as part of this reorganization.

The newly rebranded "Protocol" team will concentrate on three strategic goals:

1. Scaling Ethereum's base layer (L1).

2. Expanding blobspace for rollups.

3. Improving user experience (UX).

This restructuring follows a period of leadership changes within the EF, including the appointment of new co-executive directors, Hsiao-Wei Wang and Tomasz Stańczak, earlier this year. The foundation emphasizes that these changes are crucial for Ethereum's continued evolution and large-scale adoption, particularly with advancements in zero-knowledge rollups (zkEVMs) and layer-2 technologies.

New Treasury Policy Unveiled for Financial Stability

In a move to enhance financial transparency and sustainability, the Ethereum Foundation has introduced a new treasury policy. This policy aims to tie operational costs and cash needs directly to its Ether reserves and sales, ensuring long-term financial health. A key component of the new policy is the annual designation of 15% of its treasury for operational expenses, with a commitment to maintain a 2.5-year buffer in reserves.

The EF's treasury, as of October 31, 2024, totaled approximately $970.2 million, with over 81% held in Ether. The foundation plans to regularly reassess its annual operating costs and cash runway, factoring in market dynamics and community input. This proactive approach is designed to align short-term operations with long-term strategic goals.

To increase transparency, the EF will publish quarterly and annual reports detailing its asset holdings, investment performance, and significant developments. The foundation also indicated a shift towards more engagement with decentralized finance (DeFi) protocols to generate returns on its treasury assets, a departure from its historical stance of strict neutrality. This includes supplying ETH to protocols like Aave and exploring new yield opportunities.

Strategic Vision for a Pivotal Period

The EF views 2025-2026 as a pivotal period for Ethereum, necessitating enhanced focus on critical deliverables. The restructuring and new treasury policy are integral to this vision, aiming to deploy resources more deliberately and provide increased ecosystem support. The foundation's leadership believes these changes will empower internal teams, drive key initiatives forward, and ensure Ethereum's continued leadership in the blockchain space.

Sources

• Ethereum Foundation restructures, rebrands Protocol team, Cointelegraph.

• 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.