Ethereum's Foundation Just Axed 54 Jobs, Killed Its Privacy Research Lab, and Cut the Budget 40% — While ETH Is Down 44%

The organization that has stewarded Ethereum since 2014 just fired 54 people, shut down its privacy research lab, and told the world it’s going on a budget diet. ETH is down 44% year-to-date.

This is not a vibe check. This is a restructuring.

The Numbers

On June 23, 2026, the Ethereum Foundation announced:

• 54 jobs eliminated — roughly 20% of its ~270-person workforce
• 40% budget cut for 2026
• PSE (Privacy and Scaling Explorations) shut down — the ZK and privacy research lab responsible for PlasmaFold, MACI, Semaphore, and private RPC
• Reorganization into five domain-focused clusters: Protocol, Access, User, Community, and Institutional

The Foundation is shifting to an endowment model — targeting annual spending at 5% of treasury assets by 2030, down from the current ~15%. That means it’s trying to operate like an academic endowment, not a startup burning runway.

What PSE Actually Was

This isn’t just a headcount reduction. PSE was Ethereum’s in-house privacy and ZK engineering team. Their work included:

• PlasmaFold — a Layer 2 design enabling private token transfers
• MACI — a private, anti-coercion on-chain voting system
• Semaphore — an anonymous credential system
• Private RPC research — preventing wallet IPs from leaking via standard RPC queries

None of this was theoretical. It was the actual engineering pipeline Ethereum’s privacy roadmap depends on. That pipeline is now closed.

The Leadership Vacuum

Since January 2026, nine senior figures have left the EF — including former co-executive directors Tomasz Stańczak and Hsiao-Wei Wang. Bastian Aue is currently serving in an interim leadership role.

One day before the EF’s announcement, five of those departed researchers launched Ethlabs — an independent, privately funded protocol lab. The dispersal of Ethereum’s core dev capacity away from the EF’s payroll is now institutionalized.

The Warning No One Wants to Hear

Former EF contributor Trent Van Epps is not being subtle. He’s warning that Ethereum’s client team ecosystem faces a structural funding gap within three to nine months as two forces converge:

1. The EF’s Client Incentive Program is expiring
2. Treasury reductions are kicking in

Client teams — the groups that actually maintain Ethereum’s execution and consensus layer software — have historically relied on EF funding. If that gap isn’t filled by outside grants or protocol revenue, multiple teams could be operating on fumes by Q4 2026.

Why Is This Happening Now?

ETH is down 44% year-to-date. The EF’s treasury is denominated partly in ETH. Lower ETH price = smaller treasury in USD terms = the 15% annual spend rate becomes unsustainable.

The Foundation is doing what any endowment does when asset values fall: cut. The pivot to a 5% spend rate is designed to ensure the EF can fund Ethereum development indefinitely rather than burning through reserves in a bear market.

The ZK lab closure and the layoffs are the price of that sustainability math.

Why This Matters for Crypto Jobs

If you’re a ZK engineer, a privacy researcher, or a protocol developer who had the EF on your interview list — that pipeline has shrunk significantly.

But here’s the counterpoint: Ethlabs just opened, and it’s staffed by the people who built this stuff at the EF. Independent protocol labs, L2 teams, and DeFi infra projects are now the natural landing spots for displaced EF talent. The demand for ZK expertise hasn’t gone away — it just moved out of the nonprofit sector and into the market.

For Ethereum builders specifically: the client teams warning is real. If you work on execution clients (Geth, Reth, Besu, Nethermind) or consensus clients (Lighthouse, Prysm, Teku), watch the EF grant announcements closely. The next few months will reveal whether the funding gap gets filled by ecosystem actors or left open.

For everyone else: this restructuring signals that even the most well-funded nonprofit in crypto isn’t immune to bear market math. The era of infinite EF grants for protocol research is over. The baton is passing to independent orgs, L2s, and protocol DAOs.

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The crypto job market is moving. Whether it’s ZK research, protocol development, or DeFi engineering — the roles are out there, just not always where you’d expect.

👉 Browse open crypto jobs at Cryptogrind and find where the builders are going next.