The foundation retreats, Ethlabs steps forward: Ethereum welcomes its largest restructuring in history

Author: Gu Yu, ChainCatcher

On June 23, the long-criticized Ethereum ecosystem welcomed two significant pieces of news.

First, several former researchers from the Ethereum Foundation established an independent nonprofit organization called Ethlabs, which received major funding support from ETH holders such as Bitmine and SharpLink. According to its introduction, Ethlabs' early work will focus on the key needs of large-scale institutional on-chain operations, including faster settlement speeds, native asset issuance, cross-chain transactions based on strong infrastructure, mainnet capacity expansion, and foundational research supporting ETH's monetary attributes.

Soon after, the Ethereum Foundation announced the end of a months-long restructuring, laying off 54 people, about 20% of its previous staff. This adjustment continues the strategic transformation of "streamlining Ethereum" and repositions the Ethereum Foundation as a lighter protocol governance and maintainer, rather than a primary core builder.

In this push and pull, Ethereum is sending a clear signal: the Foundation is actively stepping back, allowing ecosystem organizations to take on more executive functions, and Ethereum is no longer attempting to be guided by a centralized nonprofit organization that handles direction, construction, promotion, and adoption.

This could be the most important governance correction for Ethereum in the past decade.

Over the past year, external criticism of Ethereum has extended beyond ETH price performance to directly address its organizational efficiency, strategic expression, and ecosystem mobilization capabilities. Ethereum has appeared overly "correct," too slow, and overly reliant on the Foundation and Vitalik's implicit endorsement.

Today's two changes are precisely in response to these criticisms: Ethereum is not directionless, but is trying to change the way direction is generated.

1. Ethlabs Receives Ecosystem Support, but Vitalik is Absent

The establishment of Ethlabs first signifies that a new organization closer to the "industrial execution layer" is emerging within the Ethereum ecosystem.

Unlike traditional research institutions, Ethlabs' goal is not merely to propose new cryptographic directions or long-term roadmaps, but to more clearly address practical issues such as institutional on-chain operations, financial asset issuance, cross-chain transactions, mainnet capacity, and ETH's monetary attributes. Behind these issues lies Ethereum's core anxiety over the past few years: it remains the most important smart contract network, but its advantages in real institutional adoption, on-chain financial scaling, and user experience are not as solid as the market imagines.

Ethereum does not lack research or ideas. What it lacks is an intermediary layer that converts research into market adoption. This is precisely the significance of Ethlabs' emergence.

On the supporter list published on Ethlabs' official website, many influential figures from the Ethereum ecosystem can be seen, including several important individuals from the Ethereum Foundation, investors from VCs like Dragonfly and Electric Capital, and contributors from Base, Flashbots, and Uniswap. However, it is worth noting that Vitalik does not appear on this list of supporters.

This does not necessarily mean there is a disagreement between Vitalik and Ethlabs. On the contrary, a more reasonable interpretation is that he is intentionally avoiding forming too strong a personal endorsement and path interference for this new organization.

For many years, Vitalik has held significant symbolic meaning for the Ethereum ecosystem. He has proposed many forward-looking directions, such as soulbound tokens, DeSoc, privacy, account abstraction, and public goods funding, but few of these ideas have achieved large-scale market adoption.

The issue is not that these directions lack value, but rather that when every expression from Vitalik is viewed by the market as the "next phase narrative of Ethereum," the entire ecosystem can easily fall into a form of implicit dependency, thus misallocating too much time and financial resources.

Since the beginning of this year, Vitalik has published only 2 articles on his official blog, whereas he previously published at least 15 articles each year. This change itself is quite noteworthy. It does not represent a decline in Vitalik's influence over Ethereum, but rather seems to be a form of active restraint: allowing Ethereum to gradually shift from a "founder-driven public narrative" to a "technology network jointly promoted by multiple organizations, teams, and stakeholders."

If Ethlabs is to take on stronger institutional, financial, and executive functions, it cannot merely be an extension of Vitalik's will. It must prove that it can gain ecosystem trust without direct endorsement from the founder and respond to the market with tangible results.

2. The New Structure and Positioning of the Ethereum Foundation

As Ethlabs moves forward, the Ethereum Foundation is taking a step back.

For a long time, although the Ethereum Foundation was nominally just a nonprofit organization supporting the Ethereum ecosystem, it has actually played multiple roles as a strategic coordinator, research funder, protocol roadmap maker, and cultural center. It has been reluctant to become a traditional corporate headquarters while also taking on functions similar to a headquarters on many key issues.

This structure has helped Ethereum maintain neutrality and decentralization, but it has also brought side effects: slow decision-making, vague expressions, and unclear boundaries of responsibility, with the outside world both hoping for clearer strategies from the Foundation and criticizing it for having too much discourse power.

At the same time, there have been reports of internal disagreements within the Ethereum Foundation. According to previous reports from The Guardian, there were significant disagreements within the Foundation regarding strategic direction, leadership adjustments, and institutional adoption, and there was tension between the "crypto-punk faction" and the "pragmatic business faction" in the community; in March 2025, the Foundation appointed Hsiao-Wei Wang and Tomasz Stańczak as co-executive directors, which was seen as a compromise arrangement between the two cultures.

However, it is evident that after the departure of the two executive directors, the Ethereum Foundation's team restructuring in 2025 was announced as a failure, with core figures such as Josh Stark, Trenton Van Epps, and Dankrad Feist leaving one after another. Coupled with the continued decline in coin prices and increasing criticism, the Ethereum Foundation had to restructure again.

After this restructuring, the Ethereum Foundation will split its organization into multiple clusters, including protocol layer, access layer, user layer, community layer, and institutional layer, and lay off 54 people, about 20% of its previous staff. This is not a simple cost-cutting measure, but a boundary contraction: the Foundation is repositioning itself as a lighter protocol governance and maintainer, rather than the primary builder of all directions in the ecosystem.

In fact, in addition to Ethlabs, several nonprofit organizations such as the Ethereum Applications Guild, The Ethereum Economic Zone, and Argot Collective have emerged within the Ethereum ecosystem over the past year. They contribute to the Ethereum ecosystem from different angles, such as promoting applications, Rollup collaboration, and maintaining Solidity.

"The privilege of managing Ethereum should not be monopolized, but should be cautiously shared with those committed to building self-sovereign infrastructure, whether they are old friends or newcomers." The Ethereum Foundation clearly stated its position in its latest post.

3. Turning "Correct" into "Effective"

In the past, Ethereum's advantages came from the developer community, DeFi liquidity, L2 ecosystem, and protocol security. However, over the past two years, these advantages have not been fully translated into ETH's market performance. The community's criticism of the EF is essentially a form of "shareholder anxiety."

Paul Brody, chairman of the Enterprise Ethereum Alliance, once commented that the Ethereum community behaves somewhat like ordinary shareholders, "they want a return on investment." While this statement may be harsh, it is very real.

A month ago, Ryan Sean Adams, co-founder of Bankless, tweeted that "Ethereum's future can no longer rely on the Ethereum Foundation (EF). While EF is important, Ethereum needs new institutions to intervene and fill the gaps. We need an organization that truly wants Ethereum assets (ETH) to win—quantity growth—and is willing to speak out and execute. EF is not that, and will never be."

Now, Ethlabs has emerged to carry the expectations of major ETH holders Bitmine, SharpLink, and a large group of token holders. These two companies collectively hold over 6 million ETH, and their demands for Ethereum clearly extend beyond whether the technical roadmap can continue to advance, but rather whether ETH can bring substantial returns to their shareholders.

This is inherently different from the positioning of the Ethereum Foundation. EF must maintain credible neutrality and cannot directly serve ETH prices like a publicly traded company, nor can it simplify protocol governance to maximize the interests of token holders. However, new organizations like Ethlabs can take on more explicit market-oriented functions.

In other words, EF is responsible for keeping Ethereum "correct," while Ethlabs needs to prove that Ethereum remains "effective."

In the past, Ethereum could respond to market doubts with "long-termism," but as Hyperliquid takes the derivatives narrative, Solana takes the meme narrative, and Bitcoin takes the asset narrative, Ethereum must prove that it is not only the safest smart contract platform but also the most capable network to undertake the next round of on-chain financial expansion.

Of course, this shift is not without risks. Ethlabs' support from major ETH holders and institutional forces may raise new concerns about whether Ethereum is shifting from Foundation centralization to large holder centralization. Institutional adoption may also create tension with Ethereum's original crypto-punk spirit.

However, for today's Ethereum, the greater risk is not shifting too quickly, but rather continuing to linger between technical correctness and organizational sluggishness.

The market will ultimately not reward only ideas, nor will it reward only decentralized postures. It will reward networks that can maintain credible neutrality while continuously attracting capital, applications, developers, and institutions.

The establishment of Ethlabs and the restructuring of the Foundation are key steps for Ethereum in moving in this direction.