- Financial sustainability: Maintaining Ethereum’s current development capacity, which spans more than 10 client teams, researchers, and coordinators, requires an estimated budget of $30 million annually.
- Budget reduction: The Ethereum Foundation’s treasury plan, originally presented in June 2025, outlines a linear reduction in annual operating spending, dropping from 15% toward a 5% baseline level by 2030.
- Expiration of incentives: The Client Incentive Program (CIP), a four-year initiative that distributed staking rewards to infrastructure teams, officially ended in April 2026 with no replacement announced.
The Ethereum ecosystem could face a structural funding crisis that would begin to manifest within the next three to nine months.
In this regard, former Ethereum Foundation (EF) member Trent Van Epps posted on his X account that the network is heading straight into a scenario of financial pressures due to deep changes in its governance. Van Epps, who recently concluded his five-year tenure with the organization, pointed out that this outlook is not the result of a temporary deficit, but rather the execution of internal policies aimed at institutional decentralization.
https://t.co/k2GESeuJuE
— trent.eth (@trent_vanepps) June 18, 2026
The core of the issue lies in the EF’s historical strategy known as “Subtraction.” This policy seeks to progressively diminish the foundation’s direct influence to force the global community to take on a more active role in sustaining the protocol. However, data gathered by the former contributor suggests that alternative private or community financing mechanisms have not matured at the necessary pace to cover the delegated responsibilities.
Despite efforts to decentralize power, official documentation indicates that the EF maintains a centralized influence through the management of registered trademarks, communication channels, and its direct link to Vitalik Buterin. Despite this status, its financial reserves are showing signs of contraction after a decade of continuous grants aimed at boosting the ecosystem.
The impact of the end of the CIP program and the budget adjustment
The reduction in capital flows corresponds to two specific milestones within the organization’s financial architecture. On one hand, the EF began applying the guidelines of its treasury plan announced in June 2025. This planning establishes the transition from an annual expenditure of 15% of its total funds toward a permanent 5% endowment model set for the year 2030.
On the other hand, the outlook worsened following the expiration of the Client Incentive Program (CIP) in April 2026. This mechanism distributed staking dividends to node developers for four years, and the lack of a formal replacement creates uncertainty regarding the economic viability of multiple independent teams.
According to Van Epps’ projections, the loss of stable economic incentives could lead to the migration of senior researchers and specialized technicians to other commercial sectors within the crypto environment. This talent drain would weaken the technical capacity to implement scalability upgrades or shield the network against quantum computing. The analyst warned that the operational consequences of this underinvestment would become fully visible within a 12 to 18-month timeframe, a period during which reversing the deterioration of the core software would be considerably more expensive for the blockchain network.
The debate aligns with the public stances of Vitalik Buterin, who reiterated that the foundation was not designed to act as the permanent guardian of the network. The ecosystem’s progress will depend on the development of new institutions and decentralized financing models to replace the EF‘s stewardship. The next institutional oversight milestone will occur during the semi-annual budget reviews of the protocol’s main support organizations, scheduled for the end of this year.
