Ethereum Foundation: 40% Budget Cut to Fund Endowment

Ethereum Foundation is cutting its 2026 budget by roughly 40% to transition into a long-term endowment model that targets 5% annual spending after 2030 instead of the prior 15% rate.

Protocol Priorities Shift

The move forces concrete changes across the Ethereum Strawmap, the third major iteration after the Merge. Multi-client redundancy gives way to specialization backed by AI-assisted formal verification. PSE winds down its exploration unit while ZKP work moves into direct protocol and access layer implementation. Devcon scales back to lower-deficit events and fewer beyond-Ethereum megaprojects launch from the foundation itself.

Market Context and Price Action

ETH trades at $1659.39 on the four-hour chart inside a bearish structure defined by EMA50 at $1722.33 and EMA200 at $1858.38. MACD sits at -11.26 after a death cross while RSI at 34.14 shows neutral momentum. Price currently tests the lower Bollinger band support at $1669.29 with upper resistance at $1779.71. Institutional desks note that sustained closes below the lower band often precede extended tests of the 50-EMA before any recovery attempt, aligning with reduced near-term foundation spending signals.