Is Ethereum undergoing a silent power reshuffle?

Author: imToken

Over the past two weeks, Ethereum's organizational structure has undergone an unprecedented transformation.

On June 22, 2026, five former core researchers of the Ethereum Foundation announced the establishment of Ethlabs, an independently operated non-profit research and development laboratory; A day later, EF announced a new organizational structure, confirming the end of its collaboration with 54 employees—approximately 20% of the foundation's total workforce; On July 1, another independent non-profit organization, Ethereum Institutional, officially launched, taking over institutional partnerships previously handled by EF's market development team; If viewed separately, these events can easily be summarized into a familiar pessimistic narrative: the foundation facing a financial crisis, core talent leaving, and the ecosystem in turmoil. Similar arguments do indeed abound in the market. However, if we place them on the same timeline, we can actually see a more complete picture: Ethereum is consciously reducing its reliance on a single foundation, gradually dispersing the different functions that were previously concentrated within EF to multiple independent ecosystem nodes with different functions. Ethereum seems to finally be trying to answer a long-standing question: as a decentralized network gradually becomes a global infrastructure, what should the organization driving its development look like? I. Why is EF "actively shrinking"? To be honest, interpreting this series of changes in a traditional business context can easily lead to misunderstandings for most users. After all, in the narrative of traditional tech companies, layoffs almost always mean revenue pressure, business contraction, or strategic failure. However, the Ethereum Foundation (EF) is not an ordinary company. It has no shareholders in the traditional sense, does not aim for market share or quarterly profits, and does not "actually own" the Ethereum network. In a sense, EF is essentially closer to a protocol guardian, its main responsibilities being to support core protocol development, fund public goods, coordinate ecosystem resources, and uphold principles that should not be easily compromised in the development of Ethereum. This also puts EF under constant internal tension. On the one hand, Ethereum needs long-term commitment to protocol development, organizational upgrades, and public goods construction; on the other hand, if research, funding, talent, and decision-making become increasingly concentrated within the foundation, then EF itself will become Ethereum's biggest source of centralized risk. Therefore, EF has long adhered to an organizational philosophy of "subtraction." According to EF's explanation of this concept, a healthy Ethereum ecosystem should not rely on an ever-expanding foundation, but rather be maintained by a large number of independent organizations and contributors. Therefore, the success of a foundation should ultimately be reflected in its gradually declining relative influence, rather than its unlimited growth. This idea is not a spur-of-the-moment decision. In its treasury policy announced in 2025, EF has clearly stated that it will gradually reduce its scope of responsibilities and plans to reduce annual operating expenses over the next five years, ultimately moving towards a more long-term, more sustainable foundation model. Several months ago, we mentioned that since 2025, EF has indeed experienced a rather awkward period. At that time, EF was at the center of a media storm, with a barrage of criticism from the community, and some even called for the introduction of a so-called "wartime CEO" to drive change. Ultimately, a series of internal power struggles became public, forcing the highest-level power restructuring in EF's history: At the beginning of the year, Executive Director Aya Miyaguchi was promoted to President, and Vitalik Buterin promised to restructure the leadership; Subsequently, Hsiao-Wei Wang and Tomasz K. Stańczak became co-executive directors; and Etherealize, a new marketing narrative agency led by former researcher Danny Ryan, was established; Meanwhile, EF further restructured its board of directors and clarified its cypherpunk values; By mid-year, the foundation had also restructured its R&D department, integrating teams and making personnel adjustments to ensure that core protocol priorities were focused; This series of actions proved effective, significantly strengthening Ethereum's execution capabilities—on May 7, 2025, the Pectra upgrade was officially activated; less than seven months later, on December 3, Fusaka successfully launched on the mainnet. In its subsequent annual summary, EF called 2025 one of the most productive years for the Ethereum protocol layer, and these two major upgrades brought the previously frequently discussed "accelerating the pace of hard forks" closer to reality. Therefore, from this perspective, the layoffs in June 2026 were more like the first time this long-term strategy was presented to the outside world in the most direct way. After the adjustment, EF's work was divided into five main clusters: the protocol layer, access layer, user layer, community layer, and institutional layer, plus operations, management, and related support teams. EF explained that the reduction of about 20% of personnel was to concentrate the organization and resources on "work that only EF can and must complete." This is also an organization actively shrinking its boundaries. So, who will it delegate some of these tasks to? II. How to view Ethlabs and Ethereum Institutional? If a vivid analogy must be used, my understanding is that this change superficially resembles the "division of Jin into three kingdoms": Talent, R&D, and institutional functions originally concentrated within EF are beginning to be dispersed to different organizations. However, in terms of actual relationships, it's more like a functional split rather than a power struggle. That is, EF, Ethlabs, and Ethereum Institutional do not have the parent-subsidiary or hierarchical relationship found in traditional corporate structures; they are more like three interconnected nodes with different roles within the Ethereum governance network. First, there's Ethlabs. Although it was founded the day before EF announced its layoffs, by five former Ethereum Foundation researchers—whose founding members include Ansgar Dietrichs, Barnabé Monnot, Caspar Schwarz-Schilling, Josh Rudolf, and Julian Ma—they are indeed heavyweight figures who have participated in research in areas such as Ethereum finality, scaling, data availability, virtual machines, and protocol economics. However, Ethlabs explicitly defines itself as an independent, non-profit research and development lab serving Ethereum and ETH, with a mission summarized in one sentence: "To make Ethereum the settlement layer of the global economy." In Ethlabs' narrative, Ethereum should not merely be a blockchain for issuing tokens and running applications, but rather a neutral settlement infrastructure used by digital assets, stablecoins, on-chain markets, institutions, and AI agents. This mission determines a key difference between Ethlabs and EF: EF's core mission is to ensure that Ethereum does not sacrifice censorship resistance, privacy, and user sovereignty for short-term adoption and commercial gains. Its official organizational statement even explicitly states that the protocol team's responsibility is not to make Ethereum easier to market, nor to transform it into a financial track controlled by intermediaries. Ethlabs, however, is different. It allows for more explicit discussions of growth, ETH's value capture, institutional needs, and real-world adoption. In other words, it positions itself between two worlds: wallets, applications, Layer 2, infrastructure teams, institutions, and real users on one side, and Ethereum's core protocols, researchers, and core developers on the other, proactively translating the former's real needs into protocol development, shared standards, infrastructure, and deployable products. This also helps us better understand Ethereum Institutional's positioning. If Ethlabs takes over the "growth-oriented transformation of R&D" after EF relinquished control, then Ethereum Institutional takes over the "business and compliance promotion" that EF originally shouldered alone. In short, this non-profit organization directly took over the institutional partnership work that EF's market development team had been working on for over a year, positioning itself as a "neutral front door" for traditional institutions entering the Ethereum ecosystem. Its aim is to answer a long-standing question that Ethereum has been unable to address: "When a bank or asset management company wants to deploy a product on Ethereum, who should it contact?" This question has become increasingly urgent in recent years. As is well known, ecosystems like Solana have more clearly defined foundations, business development teams, and institutional partnership channels, leveraging highly paid and aggressive business teams to continuously expand their reach among global financial institutions. Ethereum, due to its emphasis on decentralization and trust neutrality, has long lacked a unified external interface. There's a deep contradiction here. While neutrality is an advantage in technology and governance, in the real business environment, neutrality also means "no clear leader." When an institution like BlackRock wants to deploy on Ethereum, it wants a team it can continuously communicate with, not a foundation with an aloof, absolutely neutral stance, unwilling to cater to Wall Street and sovereign wealth funds like traditional companies. Ethereum Institutional aims to resolve this contradiction: no one can represent Ethereum, but institutions still need a continuous point of communication. Therefore, its positioning—funded and incubated by Bitmine, Sharplink, and Joe Lubin, and led by veterans like Joseph Chalom from Blackstone—is undoubtedly a significant advantage, facilitating direct targeting of banks, asset management companies, custodians, market infrastructure providers, fintech companies, and sovereign institutions. According to its published information, Ethereum Institutional primarily covers five categories of work, mainly helping people understand Ethereum, identify needs, and translate these needs into truly implementable on-chain projects: Institutional Education and Communication: Helping traditional financial institutions understand Ethereum's technical architecture, governance model, and current ecosystem status; Institutional Market Intelligence: Tracking and analyzing trends, obstacles, and best practices in institutional adoption of Ethereum; ETH and Ethereum Ecosystem Promotion: Explaining Ethereum's value proposition to the traditional financial world; Industry Needs and Standards Research: Transforming institutions' actual needs into standard recommendations and product requirements; Institutional Activities and Networking: Continuously building relationships in financial centers such as New York, London, Hong Kong, and Singapore; Thus, a clearer division of labor within Ethereum began to emerge: **EF is responsible for protocol value and public interest, Ethlabs is responsible for the transition between R&D and growth, Ethereum Institutional is responsible for institutional adoption, and wallet, application, and infrastructure teams are responsible for the final product and user experience.** This also means that Ethereum governance is shifting from the relatively vague "EF coordinates everything" approach to a more modular structure. III. From "EF Drives Ethereum" to "Ecosystem Jointly Protects Ethereum" In the past, while Ethereum's governance structure was highly open, many key responsibilities naturally converged on EF, which could even be summarized as the relatively vague "EF coordinates everything." When protocol development encounters problems, people turn to EF; when market narratives lag behind, people criticize EF; when ETH performs poorly, institutional adoption is slow, or user experience fails to improve, the outside world often blames EF. This is inherently contradictory. Ethereum aspires to be a decentralized network independent of any single organization, but the entire ecosystem has long been accustomed to regarding EF as the ultimate responsible party. Now, a more modular structure is taking shape, with each key function undertaken by a corresponding independent organization. These organizations are no longer hierarchical but interconnected through shared protocol goals and ecosystem interests. Of course, this doesn't mean Ethereum has found a perfect new governance model; on the contrary, the real test has just begun. When different functions are decentralized to independent organizations, Ethereum faces higher coordination costs and needs to prevent different teams from acting independently, duplicating research, allowing funding sources to influence the technological direction, and enabling institutional adoption to gradually overshadow the interests of ordinary users. However, from another perspective, this uncertainty is itself a necessary price to pay for decentralization. A truly decentralized protocol should not forever rely on a single, ever-expanding foundation, nor should it lose its ability to continue developing simply because a few core members leave. The key to judging whether this transformation is successful is not how many people remain at EF, but rather: Whether the core protocol can continue to be upgraded stably; whether research talent leaving EF can remain in the Ethereum ecosystem; whether independent organizations can maintain collaboration and checks and balances; whether institutional adoption can expand without sacrificing openness and user sovereignty; and whether wallets and applications can translate underlying advancements into products that ordinary users can truly use. If these goals are achieved, the decline in EF's influence may actually prove that Ethereum is becoming more mature. At that time, Ethereum will no longer be a seedling requiring constant support from the foundation, but an ecosystem maintained by the foundation, research institutions, developers, wallets, applications, enterprises, and users. Just like Ethereum's decentralized network architecture, its governance structure will finally become distributed in 2026. We also firmly believe that this is not the end of the crisis, but a new beginning for a more resilient and vibrant Ethereum ecosystem.