Over the past two weeks, Ethereum has undergone an unprecedented organizational shift.
On June 22, 2026, five former Ethereum Foundation researchers announced the launch of Ethlabs, an independently operated nonprofit R&D lab.
A day later, the Ethereum Foundation announced a new organizational structure and confirmed that 54 employees, representing approximately 20% of its total headcount, would leave the organization.
On July 1, another independent nonprofit, Ethereum Institutional, officially launched and began carrying forward the institutional partnership work previously handled by EF’s market development team.
Viewed in isolation, these developments could easily fit a familiar pessimistic narrative: the Foundation is under financial pressure, core talent is leaving, and the ecosystem is entering a period of turbulence.
Similar views have indeed been circulating in market commentary.
But when these developments are viewed together, a fuller picture emerges. Ethereum appears to be deliberately reducing its reliance on a single foundation and distributing functions once concentrated within EF across multiple independent ecosystem organizations with distinct roles.
Ethereum seems to be addressing a long-standing question: when a decentralized network becomes global infrastructure, what kinds of organizations should support its continued development?
1. Why Is EF Choosing to Scale Itself Back?
To be fair, when viewed through a traditional business lens, these changes can easily be misinterpreted. In the world of conventional technology companies, layoffs almost always signal revenue pressure, business contraction, or strategic failure.
But the Ethereum Foundation is not a typical company.
It has no shareholders in the traditional sense, does not measure success by market share or quarterly profit, and does not “own” the Ethereum network in any practical sense. In many ways, EF is better understood as a steward of the protocol: it supports core protocol R&D, funds public goods, coordinates ecosystem resources, and safeguards principles that should not be easily compromised as Ethereum evolves.
This creates an inherent tension for EF.
On the one hand, Ethereum needs people committed to long-term protocol research, upgrade coordination, and public goods. On the other hand, if research, funding, talent, and decision-making become increasingly concentrated within the Foundation, EF itself risks becoming one of Ethereum’s largest sources of centralization.
This is why EF has long followed an organizational philosophy of “doing subtraction.” A healthy Ethereum ecosystem should not depend on an ever-expanding foundation, but on a broad network of independent organizations and contributors. In that sense, the Foundation’s success should ultimately be measured by a gradual decline in its relative influence, rather than by continuous organizational growth.
This was not a sudden shift. In its 2025 treasury policy, EF had already stated that it would gradually narrow its scope, reduce annual operating expenses over the following five years, and move toward a more sustainable long-term organizational model.
As we noted several months ago, EF had been going through a strained and turbulent period since 2025. At the time, it was at the center of intense public criticism, with some community members even calling for a so-called “wartime CEO” to drive change.
Eventually, those internal tensions became public, prompting EF to undertake its most high-profile leadership restructuring since its founding.
In early 2025, Executive Director Aya Miyaguchi was elevated to President, while Vitalik Buterin pledged to restructure the leadership team.
Hsiao-Wei Wang and Tomasz K. Stańczak were subsequently appointed co-executive directors.
Etherealize, a new organization focused on marketing and ecosystem narratives and led by former researcher Danny Ryan, was also launched.
At the same time, EF further reorganized its board and reaffirmed its commitment to cypherpunk values.
By mid-year, the Foundation had also restructured its R&D function, consolidated teams, and adjusted staffing to keep core protocol priorities in focus.
In hindsight, these changes appear to have brought greater focus and discipline to Ethereum’s protocol development. Pectra was activated on May 7, 2025. Less than seven months later, Fusaka also went live on mainnet on December 3.
In its subsequent annual review, EF described 2025 as one of the most productive years for Ethereum’s protocol layer. Together, the two major upgrades brought Ethereum significantly closer to its long-discussed goal of accelerating the hard fork cadence.
For more, see “Ethereum 2026: Interpreting EF’s Latest Protocol Roadmap—Is Ethereum Entering an Engineering-Driven Upgrade Era?”
From this perspective, the June 2026 layoffs look less like an isolated crisis and more like the first clear public expression of a longer-term strategy.
Following the restructuring, EF’s work was divided into five main clusters: Protocol, Access, User, Community, and Institutional, alongside operations, management, and related support functions.
EF explained that reducing headcount by approximately 20% was intended to focus the organization and its resources on the work that “only EF can and must do.”
In other words, EF is actively narrowing its own scope.
The next question, then, is who will take on the work from which EF is stepping back.
2. How Should We Understand Ethlabs and Ethereum Institutional?
At first glance, this transition may resemble a three-way split, with talent, research, and institutional functions once concentrated within EF beginning to spread across different organizations.
In practice, however, this is better understood as a functional separation than as a formal division of power.
EF, Ethlabs, and Ethereum Institutional do not have a parent-subsidiary or superior-subordinate relationship. They are better understood as three connected organizations within Ethereum’s broader governance network, each with a distinct role.
First, there is Ethlabs.
Ethlabs was announced one day before EF disclosed its restructuring plan. Its founding members include Ansgar Dietrichs, Barnabé Monnot, Caspar Schwarz-Schilling, Josh Rudolf, and Julian Ma, all prominent researchers who have worked on Ethereum finality, scaling, data availability, the virtual machine, protocol economics, and related areas.
Ethlabs describes itself as an independent nonprofit R&D lab serving Ethereum and ETH. Its mission can be summarized in one sentence: to make Ethereum the settlement layer for the global economy.
In Ethlabs’ framing, Ethereum should be more than a blockchain for issuing tokens and running applications. It should become neutral settlement infrastructure for digital assets, stablecoins, on-chain markets, institutions, and AI agents.
This mission highlights an important distinction between Ethlabs and EF.
EF’s core responsibility is to ensure that Ethereum does not sacrifice censorship resistance, privacy, and user sovereignty in pursuit of short-term adoption or commercial interests.
Its own organizational description explicitly states that the protocol team’s role is not to make Ethereum easier to market, nor to turn it into a financial rail controlled by intermediaries.
Ethlabs operates from a different position. It can speak more directly about ecosystem growth, ETH value capture, institutional demand, and real-world adoption.
In other words, Ethlabs positions itself between two worlds: wallets, applications, Layer 2 networks, infrastructure teams, institutions, and end users on one side; Ethereum’s core protocol, researchers, and core developers on the other.
Its role is to translate real-world needs from the former into protocol R&D, shared standards, infrastructure, and deployable products.
This also helps explain the role of Ethereum Institutional.
If Ethlabs is intended to translate R&D into ecosystem growth as EF narrows its scope, Ethereum Institutional is intended to take on the institutional outreach and relationship-building work that EF had previously handled largely on its own.
Put simply, the nonprofit continues the institutional partnership work carried out by EF’s market development team over the previous year.
It positions itself as a “neutral front door” for traditional institutions entering the Ethereum ecosystem, aiming to address a question Ethereum has long struggled with: when a bank or asset manager wants to deploy a product on Ethereum, who exactly should it talk to?
This question has become increasingly urgent in recent years.
Ecosystems such as Solana have clearer foundations, business development teams, and institutional partnership channels. Supported by well-funded and highly proactive commercial teams, they have continued to gain ground among global financial institutions.
Ethereum, by contrast, has long lacked a unified external interface because of its emphasis on decentralization and credible neutrality.
There is a deeper contradiction here.
Neutrality is an advantage in technology and governance, but in real-world business settings, it can also mean that there is “no clear owner.”
When an institution such as BlackRock wants to deploy a product on Ethereum, it needs a team with which it can maintain an ongoing relationship, rather than a foundation that, in the name of absolute neutrality, avoids engaging with Wall Street or sovereign institutions in the way a traditional company might.
Ethereum Institutional is attempting to resolve precisely this tension: no single organization can represent Ethereum, but institutions still need someone with whom they can maintain a sustained dialogue.
Its funding and leadership may therefore become an important advantage.
Incubated with support from Bitmine, Sharplink, and Joe Lubin, and led by experienced figures such as former BlackRock executive Joseph Chalom, Ethereum Institutional is well positioned to engage directly with banks, asset managers, custodians, market infrastructure providers, fintech companies, and sovereign institutions.
Ethereum Institutional aims to help institutions understand Ethereum, articulate their needs, and translate those needs into viable on-chain projects.
Its work focuses on five areas:
Institutional education and communication: helping traditional financial institutions understand Ethereum’s technical architecture, governance model, and current ecosystem landscape.
Institutional market intelligence: tracking and analyzing trends, obstacles, and best practices in institutional Ethereum adoption.
ETH and Ethereum ecosystem advocacy: explaining Ethereum’s value proposition to the traditional financial sector.
Industry needs and standards research: translating real institutional requirements into standards recommendations and product requirements.
Institutional events and relationship-building: establishing sustained relationships in financial centers such as New York, London, Hong Kong, and Singapore.
As a result, a clearer division of labor is emerging within Ethereum.
EF safeguards the protocol’s core values and the public interest. Ethlabs connects protocol R&D with ecosystem growth. Ethereum Institutional supports institutional adoption. Wallets, applications, and infrastructure teams turn these underlying developments into products and user experiences.
This also suggests that Ethereum governance is moving away from the relatively vague model in which “EF coordinates everything” and toward a more modular organizational structure.
3. From “EF Drives Ethereum” to “The Ecosystem Stewards Ethereum Together”
Ethereum’s governance structure has always been highly open, but many key responsibilities have still naturally flowed back to EF.
The ecosystem could almost be summarized through the somewhat vague assumption that “EF coordinates everything.”
When protocol research encountered difficulties, people looked to EF.
When Ethereum’s market narrative fell behind, people criticized EF.
When ETH underperformed, institutional adoption moved slowly, or the user experience failed to improve quickly enough, the outside world often treated EF as the organization ultimately responsible.
This was itself a contradiction.
Ethereum aims to become a decentralized network that does not depend on any single organization, yet the ecosystem has long been accustomed to treating EF as its ultimate point of accountability.
Now, a more modular structure is taking shape.
Each key function is increasingly being handled by a corresponding independent organization. These organizations are connected not by hierarchy, but by shared protocol goals and ecosystem interests.
Of course, this does not mean Ethereum has already discovered a perfect new governance model.
On the contrary, the real test is only beginning.
Once different functions are distributed across independent organizations, Ethereum will face higher coordination costs.
It will also need to prevent teams from working in silos, duplicating research, becoming overly influenced by funders, or allowing institutional priorities to outweigh the interests of ordinary users.
From another perspective, however, this uncertainty is part of the price of decentralization.
A truly decentralized protocol should not depend indefinitely on an ever-expanding foundation. Nor should its continued development depend on a small number of core contributors remaining within a single organization.
The key to judging whether this transition succeeds lies not in how many people remain at EF, but in whether:
- the core protocol can continue to upgrade steadily;
- research talent can remain within the Ethereum ecosystem after leaving EF;
- independent organizations can collaborate effectively while maintaining meaningful checks and balances;
- institutional adoption can expand without sacrificing openness or user sovereignty; and
- wallets and applications can turn underlying progress into products that ordinary users can actually use.
If these goals can be achieved, the decline of EF’s relative influence may ultimately prove that Ethereum is becoming more mature.
At that point, Ethereum will no longer depend on a single foundation for its continued development. It will become an ecosystem jointly sustained by EF, independent research organizations, developers, wallets, applications, enterprises, and users.
In 2026, Ethereum’s governance structure is finally beginning to reflect the distributed nature of the network itself.
We believe this is not the endpoint of a crisis, but the beginning of a more resilient and vibrant Ethereum ecosystem.