Woofun AI reports that on June 23, a coalition of former Ethereum Foundation researchers launched Ethlabs, a non-profit organization explicitly designed to propel Ethereum into its next growth phase and secure institutional adoption. This new entity, frequently characterized by industry observers as the "second Ethereum Foundation," features a roster comprising five former senior researchers and key contributors from the original Foundation prominently listed on its public-facing website. The formation of Ethlabs occurs against a backdrop of significant personnel attrition at the Ethereum Foundation, where six contributors departed or took long-term leave between April and May of this year, predominantly from the core engineering team and research department. Key figures who exited include John Stark, who served in EF management, co-founded ETHGlobal, and co-chaired the "Trillion Dollar Security Initiative" before leaving after five years; Carl Beek, a researcher instrumental in the Beacon Chain launch who departed after seven years; and Julian Ma, a mechanism and product researcher who left following four years of service.

Additionally, Tomasz Stańczak, who assumed the role of Joint Executive Director in March 2025, resigned in February of this year less than a year into his tenure, with the Foundation citing a shift to "focus on AI-related work," while fellow Joint Executive Director Hsiao-Wei Wang announced his resignation last week approximately 15 months after taking office.

The departure of these senior figures coincides with a broader statistical decline in development activity surrounding the network. Data compiled by Token Terminal indicates that over the past year, the count of Ethereum core developers has fallen continuously from a peak of 215 to a current total of 149. In terms of overall active developer engagement, Solana has now surpassed Ethereum, a shift confirmed by Chainspect's latest metrics which show Solana hosting 10,834 active developers compared to Ethereum's 10,460. This erosion of human capital has prompted a structural response from the Ethereum Foundation itself. In an official blog post dated June 23, the Foundation announced a restructuring plan organized around clusters including protocol, access, user, community, and institutional layers, which will result in the reduction of 54 colleagues, representing approximately 20% of the total EF team. The official rationale provided for this adjustment is the implementation of the Mandate released this year alongside the Treasury Management Policy from last year, aiming to align the organizational structure more closely with the current strategic priorities of the Ethereum ecosystem.

Vitalik Buterin addressed the financial implications of these changes in a detailed post, outlining a budgetary approach that involves a roughly 40% cut to the Ethereum Foundation's budget. He clarified that this reduction is not merely an exercise in removing "dead weight" and noted that not every departing individual can be classified as inefficient. Despite these internal adjustments, the funding crisis facing the Foundation remains a tangible concern for the ecosystem's stability. On June 19, Trent Van Epps, the former Ethereum Foundation Core Development Coordinator, published an analysis warning that as the Foundation advances its "Subtraction" governance strategy and gradually shrinks its treasury, the expiration of the four-year Client Incentive Program (CIP) in April of this year could precipitate a slow-brewing funding crisis within the next 3 to 9 months. Van Epps highlighted that currently, more than 10 Ethereum client teams, research institutions, and coordination organizations are operating normally, requiring approximately $30 million in annual funding to maintain operations. He cautioned that persistent funding insufficiency could trigger key developer attrition, decelerate protocol upgrades, and ultimately weaken Ethereum's long-term competitiveness in critical areas such as scalability, quantum computing defense, and network maintenance.

Contrasting views on the severity of this potential crisis have emerged from key industry stakeholders. BitMine Chairman Tom Lee responded directly to these concerns, stating, 'In my view, the probability of this "crisis" happening to ETH is zero. The funding is in place.' This confidence is reflected in the substantial support Ethlabs has secured from major entities, including Tom Lee's BitMine, Sharplink as the leading Ethereum treasury company, former Ethereum co-founder Joe Lubin, SNZ Holding, and a coalition of over 50 prominent ecosystem project builders, L2 founders, core devs, investors, institutions, and researchers.

However, market dynamics suggest a shifting landscape where Ethereum faces stiff competition in high-value application sectors. In the current trend of stock trading within the crypto world, Solana set a record with nearly $1.3 billion in tokenized stock weekly trading volume. In stark contrast, the trading volume of tokenized stocks on the Ethereum mainnet during the same week was only about $312,800. Similarly, in the on-chain TCG card pack market, another popular crypto narrative, the two largest platforms, Collector Cards and Courtyard, are located on Solana and Polygon respectively, further illustrating the competitive pressure on the Ethereum mainnet.

Amidst these challenges, Aerugo, the Executive Director of the Ethereum Foundation, recently published a lengthy article delineating "What the Ethereum Foundation should and should not do." Regarding the scope of necessary actions, he emphasized the critical need to address the MEV problem, continue strengthening privacy protocols, prevent staking centralization, promote user self-custody, and for the EF to take the lead in actively using more ETH. Conversely, regarding actions to avoid, he stated that the EF should not blindly chase hype, cater to speculators, or compromise on principles for the sake of institutional adoption. The strategic divergence between the Foundation's austerity measures and the new initiatives of Ethlabs highlights a complex transition period for the network. On their official website, Ethlabs writes: "We still find it hard to expect that Ethlabs will 'reignite innovation on Ethereum,'" a statement that underscores the cautious optimism surrounding this new venture. The simultaneous contraction of the Ethereum Foundation and the rise of a well-funded successor organization marks a pivotal moment where the network's future trajectory will likely depend on how effectively these fragmented resources can be re-coordinated to address the specific technical and economic challenges identified by both internal and external stakeholders.