Original｜Odaily Planet Daily（@OdailyChina）
Author｜Wenser（@wenser2010）
Last night, the Ethereum Foundation's protocol support team officially announced that the team has officially disbanded. Previously, Wang Xiaowei, the co-executive director of the Ethereum Foundation, who was seen as “one of the representatives of the EF organizational reform,” has also officially resigned. So far, at least 8 senior personnel have left the Ethereum Foundation this year.
The other side of the organizational and personnel changes is that non-profit independent organizations such as ETHLabs and Ethereum Institutional are carving out functions and replacing the Ethereum Foundation; this also coincides with the recent technological progress of the Ethereum Foundation's security team using AI agents for red team testing on the ETH network and discovering real vulnerabilities.
As ETH prices face wave after wave of industry inquiries, the Ethereum Foundation is confronted with a more complicated and diverse set of contradictions and tests following internal reforms, along with the fragmentation of Ethereum's leadership agencies.
The Ethereum Foundation Enters a Decline: Competitors Rise, Talent Drain, and the AI Shift
The Ethereum Foundation (hereafter referred to as EF) has long been criticized for its rigid structure, decisions made by a few, the values of the organization, and its market sentiment-affecting sell-off actions. Criticism from within the Ethereum community has been particularly intense; not long ago, Bankless founder David Hoffman even resorted to “selling off the last ETH positions” to express his dissatisfaction with the EF, calling on the Ethereum community to engage in ecological construction in their own ways.
Now, the official disbandment of the EF protocol support team has exposed the internal conflicts and crises of the EF organization to everyone like a thunderbolt. It is worth noting that this round of organizational changes is particularly different from the organizational changes initiated by Ethereum founder Vitalik last year—this is a complete personnel overhaul, seen as “the largest layoff since the establishment of EF,” rather than previous changes among certain leaders.
When the Leader of the Ethereum Ecosystem Chooses to Cut Off the Tail to Survive: The History of the EF Major Layoffs
Everything started with the official release of "EF New Structure" on June 23 by EF.
In this lengthy article of thousands of words, EF detailed its new organizational structure, dividing it into protocol layer, access layer, user layer, community layer, and institutional layer, and explained that “this organizational restructuring results in 54 layoffs, accounting for 20% of EF’s member count.” Even more disheartening is that the announcement began with: “Through this process, we obtained the structure, activities, and personnel necessary to tackle the upcoming key tasks.” In other words, the personnel and departments laid off are deemed redundant, unnecessary, and without value.
It must be said that EF, which has always presented itself as a research organization and an ecological leader with an academic temperament, has for the first time shown its ruthless side in organizational management.
EF New Structure Diagram
The Disbandment of the EF Protocol Support Department as an Important Sign of EF Organizational Fragmentation
It is worth mentioning that the EF protocol support department's work focused on infrastructure development, mainly responsible for coordinating the Ethereum protocol development process, including organizing and coordinating core developer meetings, tracking Ethereum network upgrades, supporting EIP advancement, and running the Ethereum protocol. Now, its main functions have been transferred to the protocol layer of EF.
On the same day that EF announced the new structure, a non-profit research and development lab called Ethlabs, co-founded by five former EF researchers, officially announced. The organization aims to promote Ethereum as the settlement layer for the global economy and has received support from Ethereum co-founder Joe Lubin (Chairman of Sharplink and founder of Consensys), BitMine (an Ethereum treasury company under Tom Lee), Sharplink, and various investment institutions, Ethereum ecosystem projects, independent individuals, and EF foundation members.
ETHLabs Community Participants List (Source: Official Account)
On July 1, a new organization called Ethereum Institutional was officially introduced, co-founded by former EF members David Walsh, Marius Smith, and Matthew Dawson.
This organization focuses on the concept of “Ethereum's financial institutional application program,” dedicated to promoting the institutionalization of Ethereum and its secondary nodes, applications, and the entire ecosystem. At the same time, the organization emphasizes that it collaborates with Ethlabs, Etherealize, and the Enterprise Ethereum Alliance to serve institutional needs and explain Ethereum's value propositions to banks; Ethlabs focuses on turning related requirements into technical products. As a non-profit independent organization, Ethereum Institutional will provide free consultations on Ethereum applications for banks and asset management companies.
One week later, Ethereum Institutional announced the launch of core team recruitment, focusing on recruitment for institutional business development (Institutional GTM), marketing and community operations, as well as solution architecture and technical project lead positions in the coming weeks.
Thus, the EF layoff storm officially concluded with the emergence of two major non-profit independent organizations and the disbandment of the protocol support department, marking an imperfect end to last year’s “internal organizational reform” driven by Vitalik. Aside from the organizational-level fragmentation and the loss of high-level talents like executive director Wang Xiaowei, EF also faces the shock of AI technologies.
The Era of AI Offense and Defense Begins, EF Security Team Tests Upgrades
Yesterday, researchers from the EF protocol security team stated in a blog post that they have deployed a series of AI agents to test the software dependent on the Ethereum ecosystem, searching for vulnerabilities in crypto systems, protocol codes, and smart contracts.
The vulnerabilities discovered by the AI agents include a remotely triggered panic issue in the libp2p gossipsub used by the Ethereum consensus client, which has been fixed and disclosed on Github as CVE-2026-34219.
Researchers stated that the AI agents are organized into specialized roles for reconnaissance, searching, patching, and verification, used to identify potential attack paths, reproduce faults, and verify their applicability to production code. EF stated that AI has not replaced security researchers, but has changed the way of working, enabling the team to cover far more than manual review; however, researchers need to exercise more cautious judgment on a large number of seemingly credible conclusions.
Considering today’s announcement of the official launch of the GPT 5.6 model, the subsequent maintenance of the Ethereum protocol security may be jointly handled by the AI model and EF security researchers. Moreover, although EF now mentions that “AI has not replaced researchers,” as AI models continue to develop and evolve, the personnel of the EF security team and even the entire organization may further shrink. In other words, EF will also face challenges from AI models regarding the organizational structure and its own functional execution.
Conclusion: The EF Organizational Reform Stage Ends, May Become an Ecological Mascot in the Future?
Last January, we conducted a systematic analysis of EF's organizational reform in the article “Vitalik Fires the First Shot of Reform, Where Does the Ethereum Foundation Go?”. At that time, Vitalik was ambitiously promoting EF's organizational reform; this May, after more than a year of organizational innovation, Vitalik instead indicated that “the Ethereum Foundation should not be the center of the ETH ecosystem, but will turn to a smaller and long-termism route.”
It must be said that after ETH has grown to an asset with a market cap of over a hundred billion, the EF, as an official ecological organization established nearly 10 years ago, has entered the awkward situation of “a large ship difficult to turn around,” and it's no wonder Vitalik previously boasted—“I will no longer write conventional blog posts, deciding to try writing some science fiction stories about decentralized governance.”
As former EF researcher and Ethlabs member Ansgar Dietrichs mentioned earlier this month in a podcast, “after not being able to break through $5,000 for five years, ETH still lacks a clear value narrative.”
Currently, it seems that EF finds it difficult to carry the flag of “revitalizing the Ethereum ecosystem and driving ETH prices beyond,” and future large-scale adoption and institutional investment may have to rely on organizations like ETHlabs, Ethereum Institutional , and Etherealize.
Perhaps, in the not-so-distant future, playing the role of an “ecological mascot” may be more suited for EF.
Recommended Reading
Ethereum Falls into a “Midlife Crisis”: A Data Analysis of Development Performance
Known: ETH=Nokia. Seeking: Ethereum=iOS?
Ethereum is “ill”; do these three remedies address the issue?
Where Do We Go? A Brief Analysis of the Three Major Abstract Issues Facing the Ethereum Ecosystem
Counting Ethereum's Seven Deadly Sins, Who Can Play Its “Rescue Anthem”?
Where Lies Ethereum's Orthodoxy? An In-Depth Explanation of Vitalik's "Cryptocurrency Masterpiece"
Bankless Founder Liquidates ETH, Collective Disillusionment in Ethereum Belief
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