Vitalik Says Ethereum Foundation Needs to Shrink – Here Is Why That Matters

• Vitalik Buterin says the Ethereum Foundation is becoming “a smaller ship” focused on privacy, censorship resistance, and protocol security
• Multiple high-profile Ethereum Foundation members have departed in recent months amid growing internal tensions
• Ethereum is down roughly 57% from its 2025 high while criticism around leadership, funding, and ETH sales continues building

Vitalik Buterin says the Ethereum Foundation is intentionally shrinking — not collapsing, not pivoting into growth mode, but narrowing itself into what he describes as a leaner, more focused organization built around Ethereum’s original cypherpunk values.

In a lengthy post on X, Buterin explained that the Foundation is choosing “longevity over breadth,” arguing it should function as only one contributor within Ethereum’s broader ecosystem rather than acting as the permanent steward of the network.

That framing lands differently right now because Ethereum is already navigating a period of visible internal turbulence.

Ethereum’s Leadership Exodus Is Getting Harder to Ignore

Several key figures have left the Ethereum Foundation since the organization released a controversial new mandate earlier this year.

Last week alone, two long-time veterans resigned, while researcher Dankrad Feist publicly argued Ethereum may need a new economically aligned entity focused more directly on increasing ETH value.

The Foundation’s March mandate also drew criticism for explicitly downplaying price-focused priorities while emphasizing themes like openness, privacy, censorship resistance, and even references to Milady Maker NFTs.

That combination did not exactly calm institutional nerves.

Buterin Says Ethereum Needs Principles More Than Price Pumps

Under interim co-executive director Bastian Aue, the Foundation is now centering itself around a framework called CROPS — censorship resistance, openness, privacy, and security.

Buterin argued that focusing purely on making Ethereum faster and cheaper would simply lead to “mediocrity.” Instead, he wants Ethereum focused on preserving decentralization, improving protocol safety, and eventually creating provably bug-free systems using AI-assisted development.

He also stated the Foundation will sell less ETH moving forward as it enters what he described as a period of “mild austerity.”

That matters because both the Foundation and Buterin himself have faced criticism for repeated ETH sales during periods of market weakness.

Ethereum’s Bigger Identity Crisis Is Still Unresolved

Ethereum today sits in an awkward position. It remains the dominant smart contract ecosystem by developer activity and institutional infrastructure, yet ETH itself has badly underperformed relative to expectations.

The asset has fallen roughly 57% from its 2025 peak near $4,950 and currently trades around $2,100.

At the same time, competing ecosystems like Solana and Sui are increasingly pushing narratives around speed, UX, AI integration, and privacy — areas where Ethereum now appears to be playing defense more often than setting the agenda.

Vitalik Wants Less Control, Not More

One of the more important parts of Buterin’s comments may have been personal. He openly stated he wants his own influence within the Ethereum Foundation to continue decreasing over time.

He also revealed that roughly 90% of his personal net worth remains tied to ETH, emphasizing his continued alignment with the ecosystem despite the criticism surrounding it.

The message overall was not “Ethereum is failing.”

It was closer to: Ethereum’s future may require becoming smaller, more principled, and less centralized around any single organization — including the Foundation itself.

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