Ethereum Foundation Undergoes Major Restructuring Amid Criticism

In 2026, the Ethereum Foundation initiated substantial changes in response to increasing criticism from developers, investors, and community members regarding its governance and technical direction. Concerns emerged that the foundation focused too heavily on layer-2 scaling solutions while neglecting necessary improvements to Ethereum's base layer.

The first major shift occurred in February when co-executive director Tomasz Stańczak announced his resignation, having guided the organization through its initial restructuring. Shortly after, the foundation introduced a new mandate that redefined its role within the Ethereum ecosystem, emphasizing its long-term stewardship over direct construction and coordination duties. This new direction is founded on the CROPS framework, which stands for censorship resistance, resilience, openness, privacy, and security.

Following the leadership change, the foundation experienced one of the largest turnover periods in its history, with nine senior leaders, researchers, and executives departing. While these changes raised questions about the foundation's future, its leadership insisted that the restructuring represented a necessary reset rather than a decline.

In June, co-executive director Hsiao-Wei Wang resigned, leading to the announcement of a significant restructuring initiative that resulted in the elimination of about 54 positions, or one-fifth of the workforce. This move aimed to streamline operations and reduce the annual operating budget by approximately 40% to enhance financial sustainability. The organization reorganized its remaining staff into five core groups focused on areas it deemed essential.

This restructuring coincided with the rise of new entities intended to take on roles traditionally held by the foundation. ETHLabs launched, supported by leading companies within the Ethereum ecosystem, to accelerate research, coordinate the ecosystem, and foster product development outside the foundation's purview. Additionally, Ethereum Institutional was introduced as an initiative aimed at aiding enterprises, asset managers, and nonprofits in adopting Ethereum through research, education, and standards development. Another spin-off, EthSystems, emerged as a for-profit entity focused on creating infrastructure that ensures transaction confidentiality for financial institutions leveraging Ethereum.

Together, the developments of 2026 signify a historic transformation for the Ethereum Foundation. Beginning with community criticism over its governance, the foundation now presents a leaner structure, new leadership, and a redefined mission, relying increasingly on external organizations to manage research, institutional adoption, and protocol development.