Author: Jae, PANews

Despite the recent continuous decline in ETH prices, Ethereum co-founder Vitalik Buterin has been releasing a series of signals regarding technological evolution and ecosystem development.

2026 is seen by Vitalik as the year Ethereum "reclaims lost ground." In addition to technical efforts to reverse the centralization concerns caused by the pursuit of scalability over the past decade, the Ethereum Foundation has launched a "financial slimming" plan, and Vitalik himself will donate more than 16,000 ETH to promote an open-source, verifiable, full-stack ecosystem.

These moves are an attempt to add more certainty to Ethereum's future amidst the market's volatile and uncertain environment.

Saying goodbye to excessive stimulus, the foundation embarks on a "financial streamlining" initiative.

Last week, Vitalik tweeted that the Ethereum Foundation (EF) is entering a phase of "moderate austerity".

Data from on-chain analytics platform Arkham shows that the foundation currently holds approximately $392 million worth of ETH, while Vitalik personally holds approximately $517 million. Given the volatile price of ETH, the foundation has decided to implement stricter financial discipline over the next five years.

This decision stems from the pressure of dual objectives: on the one hand, Ethereum needs to deliver a roadmap with tight deadlines to ensure its status as a high-performance, scalable "world computer"; on the other hand, the foundation must guarantee its sustainable development capabilities over the long term to withstand market fluctuations and external challenges.

However, fiscal austerity does not mean a halt to development or investment, but rather a "focus." The foundation's role is also shifting from an "ecological funder" to a "protocol guardian." The foundation will allocate resources to the development of underlying protocols, while some tasks that were originally designated as "special projects" will be handed over to Vitalik personally.

Vitalik emphasized that Ethereum's priority is shifting from "pursuing mainstream adoption" to "providing tools for those who truly need it." This will be a battle against "corporate waste."

So-called enterprise-grade solutions often sacrifice decentralization excessively for compliance or convenience, but Ethereum will prioritize tools that enable individuals and communities to achieve autonomy, security, and collaboration in this new phase. This return to the "cyberpunk" spirit may guide Ethereum to reshape its long-term fundamentals.

Recently, the Ethereum Foundation announced its funding situation for Q4 2025. The funding amount decreased from approximately $32.65 million in Q1 2025 to $7.38 million in Q4. The main funding areas are core areas such as protocol growth, developer tools, cryptography and zero-knowledge proofs, and consensus layers.

This also reflects that the foundation has shifted from broad-based approach to targeted approach, abandoning blind ecological expansion and instead focusing on the stability and security of underlying protocols.

The foundation's strategic downsizing is also a stress test of its organizational resilience. As the bull market's hot money recedes, the question of whether the Ethereum ecosystem can survive on intrinsic value and financial discipline is being answered.

It is worth mentioning that, compared to Bitcoin's controversial stance on quantum defense, the Ethereum Foundation has demonstrated a stronger sense of urgency and action.

Recently, the Ethereum Foundation has formed a dedicated post-quantum team and made this work a top strategic priority for the Ethereum network. This process also indicates that it is shifting from background research to active engineering practice, which will build a stronger security shield for Ethereum.

He personally invested 16,000 ETH, targeting full-stack software and hardware systems.

In stark contrast to the foundation's contraction, Vitalik's personal funds were aggressively betting.

To fill the potential funding gap caused by the foundation's downsizing, Vitalik will assume responsibilities under the foundation's "Special Project" and has already withdrawn 16,384 ETH (approximately $45 million) from his personal address. This funding is dedicated to building an open-source, secure, and verifiable full-stack hardware and software system to protect personal lives and the public environment. According to OnchainLens monitoring, Vitalik has sold 1,441 ETH in the past two days, totaling $3.297 million, which may be used for the donation program.

Interestingly, the number 16,384 has strong symbolic significance, as it represents the genesis launch threshold of the Ethereum Beacon Chain, perhaps reflecting Vitalik's high expectations for Ethereum to enter a new five-year development phase.

Essentially, this is not just a simple allocation of funds, but a significant investment in the open-source, verifiable, full-stack ecosystem. Vitalik once argued in his blog that the internet has become a major part of real life, with everything from finance and communications to healthcare being driven by digitalization.

However, if the underlying operating system, processor, or compiler is a closed "black box," then even if the blockchain is decentralized, users still face the risk of a "Trojan horse."

Full-stack verification means that users can verify everything from the hardware instruction set to the terminal user interface (UI).

Ethereum will play the role of a "trust anchor" in this endeavor. By delegating verification capabilities to end users, it will eliminate the "passive trust" users place in centralized infrastructure service providers.

Therefore, Vitalik's donations are used in a wide range of applications, not limited to the traditional scope of blockchain, but also covering application areas such as software and hardware, communications, and even biotechnology.

Open source silicon (Vensa project): aims to promote the commercialization of open source hardware and ensure that security applications no longer rely on closed-source, untrusted chip architectures.
Advanced privacy solution (ucritter): Supports the integration of zero-knowledge proofs (ZK), fully homomorphic encryption (FHE), and differential privacy technology stacks.
Encrypted Communications and Operating Systems: Funding open-source encrypted communication applications, decentralized social media, and "native-first" operating systems to combat monitoring by centralized platforms.
Biotechnology: This includes support for open-source vaccine technologies and investment in indoor air quality monitoring tools.

Vitalik's donation will also establish a private funding system that complements the foundation, further increasing the fault tolerance of the Ethereum ecosystem.

Reconstructing the creator economy, proposing the establishment of a creator prediction market

At the application layer, Ethereum's creator economy experiment has also entered deeper waters.

During the last bull market, Creator Coins were once highly anticipated by the market, which believed that they would solve the problem of platforms exploiting creators, but the results were minimal.

Vitalik bluntly stated that in an era where AI can generate massive amounts of content at low cost, simply increasing incentives will only lead to speculative bubbles. The real challenge lies in how to identify and amplify high-quality content.

In other words, the fundamental problem with the "creator token" model is not insufficient incentives, but the lack of a "curatorship" mechanism for selecting high-quality content.

Currently, most creator tokens are caught in a "traffic-speculation" cycle: the token price reflects the creator's traffic rather than the depth of their work. This model often drives creators to produce content that caters to algorithms and short-term speculators, ultimately leading to the mediocrity of the ecosystem.

Furthermore, because creator tokens are often driven by speculators, their holder groups lack diversity and are easily manipulated by whales. Any individual with financial advantage can gain control of governance by purchasing 51% of the tokens, leading to a severe disconnect between the tokens and the quality of the content they represent.

Vitalik cited Substack as an example, pointing out that it established a deep subscription system based on reputation and subjective filtering. Although Substack is not decentralized, it demonstrates the value of "filtering mechanisms" in the content ecosystem.

Inspired by Substack, Vitalik proposed establishing a "creator prediction market" system:

Create a DAO screener: Establish small DAOs that are not for the purpose of token issuance but have strong curatorial capabilities, and use these organizations as gatekeepers to discover and endorse high-quality creators.
Tokens as a predictive tool: Transform the function of creator tokens into a predictive tool, that is, to predict whether creators who issue tokens will be accepted by the DAO.

The value of creator tokens will be anchored through a buyback and burn mechanism after they enter the DAO, thereby linking the token value to the creator's professional recognition.

This will also prompt speculators to transform into "predictors of potential creators," directing the game toward the quality of the content itself.

This strategic shift means that Ethereum will no longer focus solely on how to "distribute benefits," but rather on how to "define value." By incorporating a "creator prediction market" system, Ethereum is attempting to build a content distribution layer that is closer to a knowledge marketplace, thereby curbing the spread of spam.

Mainnet expansion squeezes survival space; the L2 scenario will be rewritten.

Looking back at its development history, Ethereum's exploration of scalability has always been a process of continuous evolution and revision. As the core of Ethereum's scaling narrative, L2 is now facing its most rigorous scrutiny.

Recently, Vitalik Buterin stated bluntly that the original vision of L2 as "brand sharding" is no longer applicable unless L2 can achieve "limited scalability" or provide unique innovations beyond scalability. This statement directly addresses the current awkward situation of the L2 ecosystem.

L2 was initially tasked with relieving L1 of the high-frequency computing and storage burden, thereby reducing the user's gas load. However, the situation has changed drastically:

The leap in mainnet performance: With the significant increase in gas limits and the implementation of data sampling technologies such as PeerDAS, Ethereum L1 is becoming an extremely powerful computing layer. When mainnet fees are low enough, mediocre L2 will lose its reason for existence.
Stagnation in L2 security advancements: Many L2 projects are making slow progress toward achieving full decentralized verification (Stage 2). Some projects, due to regulatory compliance or technological inertia, prefer to remain at Stage 1, making them more like independent L1 with cross-chain bridges than extensions of Ethereum's L2.

Vitalik believes that L2 should not merely aim to be "cheaper than L1," but rather to achieve "what L1 cannot do." He listed several innovative directions for L2, which also define new rules for its survival:

Non-EVM privacy-dedicated functions/virtual machines: provide a native, easy-to-use privacy transaction environment, which is currently difficult to achieve on a large scale directly with L1.
Functional differentiation: Focus on providing features not available on the mainnet, such as efficiency optimizations for specific applications and new designs for non-financial applications such as AI, social, and identity.
Ultimate performance: Provides "extreme TPS" or "ultra-low latency" that cannot be achieved even after the main network is expanded.

Overall, the L2 market will transition from a period of rapid, unregulated growth driven by "expansion dividends" to a phase of professional competition focused on "innovation and transformation." In this process, the mediocre will be eliminated, and only the fittest will survive.

Ethereum is shifting from a period of expansion characterized by "large and comprehensive" to a period of focus characterized by "refinement and depth." It no longer attempts to become a "panacea for all problems" but has clearly defined its role as "serving those who truly need it."

The foundation initiated fiscal austerity to accumulate long-term sustainable development capabilities, while Vitalik invested personal funds to fill gaps in key areas. The dual optimization of ecology and technology is forcing ecological projects to shift from simple "speculative arbitrage" to genuine "functional innovation."

While the transformation will be accompanied by growing pains, it will also bring about a more resilient, open-source, verifiable, full-stack ecosystem, which may be the survival wisdom for Ethereum to get through the next five years.

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