The Ethereum Foundation, a key nonprofit managing the development and governance of the Ethereum blockchain, has undergone significant change in 2026 following widespread criticism from developers, investors, and prominent community members regarding its strategic direction and organizational priorities.
Leadership changes and major staff departures
As Ethereum entered 2026, concerns over a perceived lag in core network improvements compared to rapid developments in layer-2 scaling grew among stakeholders. Critics contended that the foundation had concentrated too heavily on scaling solutions, while failing to sufficiently advance the underlying network’s capabilities.
Amid internal debates over governance and strategy, a wave of senior departures began. Within several months, nine senior leaders, researchers, and executives exited the foundation, marking the largest leadership turnover in its 12-year history. These departures prompted speculation within the industry about the organization’s long-term direction. Foundation leaders maintained that the changes reflected a broader effort to restructure and streamline operations, rather than a decline.
June restructuring: Cuts and reorganization
In June, co-executive director Hsiao-Wei Wang resigned, accelerating the ongoing changes. The foundation subsequently announced its largest restructuring to date, cutting approximately one fifth of its staff by eliminating 54 positions. Annual operating expenses were reduced by around 40% as part of measures intended to improve financial sustainability.
Remaining staff were consolidated into five primary operating groups, each focused on areas the foundation described as uniquely within its mission to support. This restructuring was designed to concentrate resources and clarify strategic priorities amid an evolving ecosystem.
| Key Metric | Before June 2026 | After Restructure |
|---|---|---|
| Workforce | ~270 employees | ~216 employees |
| Annual budget | 100% | 60% |
| Operating groups | Multiple units | 5 core groups |
New organizations reshape the Ethereum landscape
As the foundation adopted a leaner profile, the ecosystem witnessed the formation of several new entities taking on important roles. ETHLabs, established by major Ethereum treasury holders, launched to bolster protocol research, ecosystem coordination, and product development outside the foundation’s umbrella.
In July, Ethereum Institutional was launched with a mandate to support enterprises, asset managers, and nonprofits in adopting Ethereum through research, education, and standards development. Shortly afterwards, EthSystems emerged as a for-profit enterprise focused on building privacy-preserving infrastructure for financial institutions operating on Ethereum.
These developments highlighted a shift in the ecosystem, with specialized independent organizations taking responsibility for areas previously managed centrally by the foundation.
Mini dictionary: ETHLabs – An independent organization launched in 2026 by major Ethereum ecosystem stakeholders, ETHLabs is focused on advancing Ethereum protocol research and product development outside the direct oversight of the Ethereum Foundation.
Implications for Ethereum’s future
The sum of these events marks the most extensive reorganization in the Ethereum Foundation’s existence. The transition, triggered by ongoing criticism of governance and technical priorities, resulted in a smaller staff, a revised mission, and increasing reliance on ecosystem organizations to drive innovation, institutional adoption, and protocol upgrades.
The introduction of groups like ETHLabs and Ethereum Institutional has shifted technical research, enterprise support, and infrastructure development into dedicated organizations beyond the foundation, suggesting a new era of decentralized management for the Ethereum ecosystem.
