From a "Single Foundation" to "Multi-Node Governance": Is Ethereum Undergoing a Silent Power Restructuring?

Over the past two weeks, an unprecedented transformation has been underway at the organizational level of Ethereum.

• On June 22, 2026, five former Ethereum Foundation core researchers announced the establishment of Ethlabs, an independent non-profit research and development laboratory;
• A day later, the EF unveiled its new organizational structure, confirming it would part ways with 54 employees—approximately 20% of the Foundation's total staff;
• On July 1st, another independent non-profit organization, Ethereum Institutional, officially launched, taking over the institutional partnership work previously handled by the EF's business development team;

Viewed in isolation, these events could easily be summed up by a familiar pessimistic narrative: the Foundation is facing a financial crisis, core talent is leaving, and the ecosystem is in turmoil.

The market is indeed rife with similar sentiments.

However, when placed on the same timeline, a more complete picture emerges: Ethereum is consciously reducing its reliance on a single foundation, gradually distributing the various functions once concentrated within the EF across multiple independent, specialized ecosystem nodes.

Ethereum seems finally to be attempting to answer a perennial question: As a decentralized network gradually becomes global infrastructure, what should the organizations driving its development look like?

1. Why is the EF "Actively Shrinking"?

To be fair, interpreting this series of changes within a traditional business context would easily lead most users to misunderstand. After all, in the narrative of traditional tech companies, layoffs almost always signify revenue pressure, business contraction, or strategic failure.

But the Ethereum Foundation is not an ordinary company.

It has no shareholders in the traditional sense, does not target market share or quarterly profits, and does not "actually own" the Ethereum network. In a sense, the EF is more akin to a protocol steward. Its primary responsibilities are supporting core protocol research and development, funding public goods, coordinating ecosystem resources, and upholding principles within Ethereum's development that should not be easily compromised.

This also places the EF in a state of constant internal tension.

On one hand, Ethereum requires 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, the EF itself becomes Ethereum's biggest centralization risk.

Therefore, the EF has long adhered to an organizational philosophy of "doing less" or subtracting. According to the EF's interpretation of this concept, a healthy Ethereum ecosystem should not rely on an ever-expanding foundation but should be sustained by a multitude of independent organizations and contributors. Thus, the Foundation's ultimate success should manifest as a gradual decline in its relative influence, not unlimited growth.

This approach is not an impromptu decision. In its treasury policy announced in 2025, the EF had already clearly stated its intention to gradually narrow its scope of responsibilities, planning to reduce annual operational expenditure over the next five years and eventually move towards a more long-term, sustainable foundation model.

Months ago, we also mentioned that since 2025, the EF had indeed experienced a rather awkward period. It found itself at the center of a public opinion storm, with community criticism rising from all sides. Some even called for a so-called "wartime CEO" to drive change. Eventually, a series of internal power struggles became public, forcing the highest-level power restructuring since the EF's inception: 

• At the start 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 were appointed Co-Executive Directors;
• Furthermore, Etherealize, a new marketing and narrative agency led by former researcher Danny Ryan, was established;
• Simultaneously, the EF further reorganized its board of directors and clarified its cypherpunk value orientation;
• By mid-year, the Foundation also restructured its research department, consolidating teams and making personnel adjustments to ensure focus on core protocol priorities;

As it turned out, this combination of measures significantly hardened Ethereum's execution capability. On May 7, 2025, the Pectra upgrade was activated. Less than seven months later, on December 3rd, Fusaka successfully landed on mainnet. In its subsequent annual summary, the EF called 2025 one of the most productive years for the Ethereum protocol layer. These two major upgrades also brought the previously discussed goal of "accelerating the hard fork pace" closer to reality (Further reading: "Ethereum 2026: Interpreting the EF's Latest Protocol Roadmap, Entering the Era of 'Engineering Upgrades'?").

Therefore, from this perspective, the layoffs in June 2026 appear more like this long-term strategy being presented to the outside world in its most intuitive form for the first time.

Post-restructuring, the EF's work is divided into five main clusters: Protocol Layer, Access Layer, User Layer, Community Layer, and Institutional Layer, plus operations, management, and related support teams. The EF's explanation is that cutting approximately 20% of its staff is intended to concentrate organization and resources on the "work that only the EF can and must do."

This is an organization actively shrinking its own boundaries. But if it's shedding some responsibilities, who is supposed to take them on?

2. How Should We View Ethlabs and Ethereum Institutional?

If we must use a vivid metaphor, the author's understanding is that this change superficially resembles the "Partition of Jin" in ancient China: Talent, R&D, and institutional functions once concentrated within the EF are beginning to disperse across different organizations.

However, in terms of actual relationships, it is more akin to a functional split rather than a power struggle. That is, the EF, Ethlabs, and Ethereum Institutional do not have a parent-subsidiary or superior-subordinate relationship as in a traditional corporate system. They are more like three nodes within the Ethereum governance network, each with a distinct role, all interconnected.

First, there is Ethlabs.

It was announced a day before the EF revealed the layoff plan, founded by five former Ethereum Foundation researchers – including key figures like Ansgar Dietrichs, Barnabé Monnot, Caspar Schwarz-Schilling, Josh Rudolf, and Julian Ma, all of whom have significantly contributed to research areas like Ethereum finality, scalability, data availability, the EVM, and protocol economics.

However, Ethlabs explicitly defines itself as an independent non-profit R&D lab serving Ethereum and ETH. Its mission is singular: "Making Ethereum the settlement layer for the global economy."

In Ethlabs' narrative, Ethereum should not just be a blockchain for issuing tokens and running applications; it should become a neutral settlement infrastructure shared by digital assets, stablecoins, on-chain markets, institutions, and AI agents.

This mission dictates a key difference between Ethlabs and the EF:

• The EF's core mission is to ensure Ethereum does not sacrifice censorship resistance, privacy, and user sovereignty for short-term adoption and commercial gains. Its official organization description even explicitly states that the protocol team's job is not to make Ethereum easier to market or to transform it into a financial rail controlled by intermediaries.
• Ethlabs is different. It can more explicitly discuss growth, ETH's value capture, institutional needs, and real-world adoption.

In other words, it positions itself between two worlds. On one side: wallets, applications, Layer 2s, infrastructure teams, institutions, and real users. On the other side: Ethereum's core protocol, researchers, and core developers. It actively translates the real needs of the former into protocol research, shared standards, infrastructure, and deployable products.

This also helps us better understand the positioning of Ethereum Institutional. If Ethlabs takes over the "translation of R&D into growth" after the EF's retreat, then Ethereum Institutional takes over the "commercial and compliance promotion" that the EF originally shouldered alone.

Simply put, this non-profit directly takes over the institutional partnership work that the EF's business development team had been conducting for over a year. It positions itself as a "neutral front door" for traditional institutions entering the Ethereum ecosystem, aiming to answer a question Ethereum has long struggled with: When a bank or asset management company wants to deploy a product on Ethereum, who exactly should they contact?

This question has become increasingly urgent in recent years.

It is well known that ecosystems like Solana have clearer foundations, business development teams, and institutional partnership windows. With high-paying and aggressive business teams, they continuously make inroads with global financial institutions. In contrast, due to its emphasis on decentralization and credible neutrality, Ethereum has long lacked a unified external interface.

A deep-seated contradiction exists here. Neutrality is an advantage technically and in governance, but in the real-world business environment, neutrality also means "no clear person in charge." When an institution like BlackRock wants to deploy on Ethereum, it wants a team it can continuously engage with, not a foundation that maintains an aloof, neutral posture, unwilling to cater to Wall Street and sovereign wealth funds like a traditional company.

Ethereum Institutional is precisely designed to solve this contradiction. No one can represent Ethereum, but institutions still need a counterparty for continuous communication.

So, incubated with funding from Bitmine, Sharplink, and Joe Lubin, and led by seasoned professionals like former BlackRock executive Joseph Chalom, this positioning is undoubtedly a significant advantage, allowing direct engagement with banks, asset managers, custodians, market infrastructure providers, fintech companies, and sovereign entities.

According to its released information, Ethereum Institutional mainly covers five areas of work, essentially helping people understand Ethereum, articulate needs, and translate these needs into realizable on-chain projects:

• Institutional Education & Communication: Helping traditional financial institutions understand Ethereum's technical architecture, governance model, and ecosystem status;
• Institutional Market Intelligence: Tracking and analyzing trends, barriers, and best practices for institutional adoption of Ethereum;
• ETH & Ethereum Ecosystem Promotion: Articulating Ethereum's value proposition to the traditional financial world;
• Industry Needs & Standards Research: Translating institutions' actual needs into standard proposals and product requirements;
• Institutional Events & Relationship Networks: Continuously building relationships in financial hubs like New York, London, Hong Kong, and Singapore;

Thus, a clearer division of labor within Ethereum begins to emerge: The EF handles protocol values and public goods, Ethlabs handles the translation between R&D and growth, Ethereum Institutional handles institutional adoption, while wallet, application, and infrastructure teams handle the final products and user experience.

This also signifies that Ethereum governance is shifting from the somewhat ambiguous "EF coordinates everything" towards a more modular structure.

3. From "EF Driving Ethereum" to "The Ecosystem Co-Guarding Ethereum"

In the past, while Ethereum's governance structure was highly open, many critical responsibilities still naturally converged on the EF. It could even be summarized as the vaguely defined "EF coordinates everything."

When protocol development encountered problems, people looked to the EF. When market narratives lagged, people criticized the EF. When ETH's performance was poor, institutional adoption was slow, or user experience failed to improve, the outside world often placed the blame on the EF.

This is inherently contradictory. Ethereum aspires to be a decentralized network independent of any single organization, yet the entire ecosystem has long grown accustomed to viewing the EF as the ultimate responsible party.

Now, a more modular structure is taking shape. Each key function has a corresponding independent organization to handle it. These are no longer in a superior-subordinate relationship but are connected by shared protocol goals and ecosystem interests.

Of course, this does not mean Ethereum has found a perfect new governance model. On the contrary, the real test has just begun.

When different functions are dispersed to independent organizations, Ethereum will face higher coordination costs. It must also prevent different teams from working in silos, duplicating research, allowing funding sources to influence technical direction, and preventing institutional adoption from gradually overwhelming the interests of ordinary users.

But from another perspective, this uncertainty itself is a necessary price to pay for decentralization. A truly decentralized protocol should not forever rely on an ever-expanding foundation, nor should it lose its ability to continue developing because a few core members leave.

The key to judging the success of this transformation is not how many people remain at the EF, but:

• Can the core protocol continue to upgrade stably?
• Can research talent, after leaving the EF, remain within the Ethereum ecosystem?
• Can independent organizations maintain collaboration and mutual checks and balances?
• Can institutional adoption expand without sacrificing openness and user sovereignty?
• Can wallets and applications translate underlying progress into products usable by ordinary people?

If these goals can be achieved, a decline in the EF's influence might actually prove that Ethereum is maturing.

At that point, Ethereum will no longer be a sapling needing constant support from the Foundation. Instead, it will become an ecosystem sustained jointly by the Foundation, research institutions, developers, wallets, applications, enterprises, and users.

Just like Ethereum's own decentralized network architecture, its governance structure, in 2026, has finally become distributed. 

We have always believed that this is not the endpoint of a crisis, but a new beginning for a more resilient and vibrant Ethereum ecosystem.