The Ethereum Foundation's first public layoffs
In the face of increasing external criticism regarding unclear technological direction, low collaboration efficiency, and centralized governance, the Ethereum Foundation (EF) is undergoing a deep organizational restructuring.
R&D team renamed and restructured, strategic adjustments spark controversy
On June 2, the Ethereum Foundation announced a restructuring of its research and development team, making significant structural adjustments to the internal 'Protocol Research and Development Team (PR&D)', and officially renamed it to 'Protocol'. This restructuring is seen not merely as an organizational adjustment but as a systematic change from strategic goals, talent allocation to governance philosophy.
The newly formed 'Protocol' team will focus on three strategic goals: expanding the mainnet (L1), enhancing data availability (blobs), and improving user experience (UX), to establish tighter collaboration mechanisms and clear resource allocation methods.
The Ethereum Foundation clearly stated that the newly formed Protocol team will expand on three strategic goals, appointing leaders for each strategic direction, namely Tim Beiko and Ansgar Dietrichs for L1 expansion, Alex Stokes and Francesco D'Amato for blob expansion, while Barnabé Monnot and Josh Rudolf will focus on improving user experience. They will be supported by renowned researcher and cryptographer Dankrad Feist, the namesake of Ethereum's new sharding proposal 'danksharding', who faced controversy after receiving a large number of tokens due to his advisory role in Ethereum's re-staking protocol EigenLayer, before resigning from the advisory position.
Organizational structure of the Ethereum Foundation before restructuring
At the same time, the Foundation also stated that some R&D members will no longer continue their positions. Although the official did not disclose the specific layoff list, from the PR&D restructuring changes, about a dozen R&D personnel left, and the departmental responsibilities have become more detailed and clear. EF encourages other ecological projects to absorb this group of experienced talents and announces the recruitment of new members, focusing on key positions including user experience lead and performance engineering lead.
The Ethereum Foundation stated that this restructuring will accelerate the pace of transforming research results into products, and advance Ethereum's scalability and user-friendliness with higher standards.
"We hope this new organizational structure will enable internal teams to focus more and push critical plans forward. At the same time, we have had to make some very difficult decisions. Saying goodbye to talented and diligent colleagues is heartbreaking. This decision does not reflect that their value or contributions are overlooked," said Hsiao-Wei Weng, co-executive director of the Ethereum Foundation.
However, the restructuring of the Ethereum Foundation has also sparked intense reactions from core developers and the industry. 'At this moment, the term 'decentralization' has quietly and permanently been removed from Ethereum's roadmap.'
Ethereum core developer Peter Szilagyi stated that great companies have long understood that their most valuable asset is people — the team members. Google even explicitly points out in its onboarding manual: developers come before users, who are ubiquitous. Organizations that fail to understand this will eventually become marginalized. Yes, that is the underlying implication.
Kyle Samani, co-founder of Multicoin Capital, also questioned the strategic adjustments of the Ethereum Foundation, pointing out that the definition of 'focus' often means reducing rather than increasing, especially emphasizing that there should be no conflicts between goals. When considering from the perspective of a third goal (i.e., L1 and L2 network expansion to improve user experience), the first goal (i.e., layoffs) contradicts the second goal (i.e., clarifying responsibilities).
Miles Jennings, policy director and general counsel at a16z crypto, recently pointed out that the crypto industry needs to move beyond the nonprofit foundation model, as it no longer meets current needs.
He believes that while the Foundation played a role in avoiding regulation and promoting decentralization in its early days, it has now become a centralized gatekeeper due to misaligned incentives, legal and economic constraints, and operational inefficiencies, straying from its original intention.
With the U.S. Congress proposing a maturity-based regulatory framework focused on control, the crypto industry is presented with an opportunity to break free from foundations. The structure of ordinary development companies is superior to that of foundations, allowing for efficient capital deployment, attracting top talent through equity incentives, and achieving rapid response and continuous growth through market feedback.
Jennings emphasized that companies achieve incentive alignment with token holders through market discipline and clear financial metrics (such as revenue, profit margins), while foundations struggle to optimize resource allocation due to a lack of accountability and profit-driven motives, and employee incentives are limited by token price fluctuations, making it difficult to sustain. Public benefit corporations, network revenue sharing, milestone-based token lock periods, and contractual protections are existing tools that can address potential misalignment between companies and token holders.
Additionally, the emerging solutions DUNA and BORGs provide simplified avenues for implementing these solutions while eliminating the complexity and opacity of the Foundation's structure. The next era of crypto will be built on scalable systems — systems with real incentives, real accountability, and real decentralization.
Advancing internal organizational restructuring, a delayed self-correction
The organizational restructuring of the Ethereum Foundation did not happen suddenly but is a concentrated eruption of years of accumulated structural contradictions and external criticisms.
In the past, external critics accused the Foundation of being overly immersed in long-term research, neglecting the short-term needs of users and developers, while also questioning its centralized governance structure.
For instance, former Ethereum Foundation engineer Hari pointed out this year that Ethereum and its virtual machine (EVM) lack a clear and cohesive technical vision, and that research and development progress is slow. If decisive changes are not made, it may become rigid in the future. He suggested reducing reliance on pure research and shifting towards a product-oriented delivery pace.
Similar calls also came from early Ethereum member Anthony DOnofrio, who criticized EF as a 'centralized decentralized organization' with an executive director, a finance department, and a paid developer circle. This structure, although effective in coordination, deviates from the ideal of decentralization, and he calls for future Ethereum to not only require technical research but also 'visionary leaders' who understand its social and political impacts.
Aave founder Stani Kulechov also previously tweeted suggesting EF reform its budget and operational structure, lay off irresponsible members, and allocate resources based on merit. He emphasized that the Ethereum Foundation should be a streamlined and efficient organization.
As the most symbolic figure of Ethereum, co-founder Vitalik Buterin's role in the Ethereum Foundation has long been controversial.
For example, in February of this year, community member Ameen Soleimani initiated a vote to explore whether Vitalik plays the role of a 'king' (governance decision-maker) or a 'prophet' (value leader) in the Ethereum ecosystem, with 80.1% of voters believing he is closer to the latter.
In response, Vitalik stated, 'The claim of having 3 out of 5 seats on the EF board has not been true since 2017; since then, I have only held 1 of the 3 seats.'
In response to criticism and structural challenges, the Ethereum Foundation also initiated several internal reform initiatives earlier this year. Back in January, Vitalik publicly announced a transformation of the Foundation's leadership model aimed at enhancing technical professionalism and strengthening communication with developers.
According to Haseeb Qureshi, managing partner of Dragonfly, it was revealed later that the EF leadership had gradually broken away from the 'not invented here' mentality, showing greater inclusivity and openness to external ideas.
In February, former Ethereum Foundation executive director Aya Miyaguchi was promoted to chair. Aya has long advocated for a 'subtraction philosophy', arguing that the Foundation should avoid becoming a highly centralized power structure, promote decentralization led by the community, and likened Ethereum to an 'infinite garden', encouraging an open, permissionless innovation ecosystem, emphasizing long-term sustainability over short-term gain.
However, her idealistic style has also sparked some controversy, with some questioning its abstraction and lack of execution. After Aya transitioned to the chair position, she primarily focused on promoting strategic cooperation and maintaining relationships, reducing her direct involvement in specific affairs, which was interpreted by the community as a 'promotion in name only.'
In addition, the Ethereum Foundation has also begun exploring the combination of AI and governance, hiring Devansh Mehta as the person responsible for AI × public product governance, and continues to strengthen technical backbone strength, appointing Hsiao-Wei Wang and Tomasz Stańczak as co-executive directors, who are key contributors to the Ethereum Beacon Chain and founders of the Nethermind execution client respectively.
While frequent senior adjustments occur, core members of the Ethereum Foundation are also continuously leaving.
For example, in January of this year, Ethereum core developer Eric Conner announced on social media his resignation from the Ethereum Foundation, pointing out issues of opacity, disconnection from the community, and resistance to change within EF, believing that the Foundation could still operate normally with an 80% budget cut; after contributing to the Foundation for seven years, Ethereum Foundation researcher Danny Ryan also announced his departure in 2024, just before Aya's appointment, and he was seen as the most supported potential leader in an informal community survey, reflecting the community's strong expectations for practical technical talent.
The aforementioned Peter Szilagyi, who is the maintainer of the Ethereum core client Geth, also announced his temporary departure last November, ending nearly a decade-long Ethereum career. He once candidly stated, 'Ethereum is losing its direction.'
It can be said that this organizational change within the Foundation is both a delayed self-correction and an experiment for future sustainable governance models. However, how to balance idealism with execution efficiency, technical research with ecological coordination, and decentralized vision with real governance will be a long-term proposition for EF and the entire Ethereum ecosystem in the next phase.
This article is a collaborative reprint from: PANews
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