Ethereum Foundation cuts 20% of staff amid record network usage and 44% ETH decline
In brief
- Ethereum Foundation cut 20% of workforce and 40% of budget on June 23 following structural review
- Network hit record 13.2M monthly active users (up 53.5% QoQ) and 25.78 transactions per second
- ETH dropped 44% YTD to $1,670; spot Ether ETFs saw nearly $1B in seven-week outflows
- Tokenized assets on Ethereum reached $203.4B, with stablecoins at $178.9B and tokenized funds up 73% YoY
- Institutional adoption by BlackRock, JPMorgan, Franklin Templeton, and Fidelity drove on-chain activity growth
Foundation Restructuring Amid Market Headwinds
The Ethereum Foundation cut roughly 20% of its workforce following a months-long review of its structure and spending. The foundation slashed its budget by roughly 40%, citing the need to create an organization capable of executing its mandate without being disrupted by short-term market movements.
The timing underscores a painful disconnect. ETH has fallen more than 44% in 2026 to trade near $1,670. US-listed spot Ether ETFs have recorded seven consecutive weeks of outflows totaling nearly $1 billion.
Yet on the blockchain itself, the story reads differently.
Network Activity Surges
The Ethereum network's monthly active users reached 13.2 million in the first quarter of 2026, up 53.5% from the previous three months. Transaction count rose 38% quarter over quarter to 200.4 million. Ethereum's throughput increased to a record 25.78 transactions per second.
Layer-1 economics improved too. Layer-1 transaction fees fell nearly 48% from the previous quarter to $39.9 million. The network has become the hub for institutional tokenization.
Institutional Adoption and Tokenization
The total value of tokenized assets on the network stood at $203.4 billion in the first quarter, including $178.9 billion in stablecoins. Tokenized funds increased 4.9% from the previous quarter and 73.1% from a year earlier to $19.4 billion. Tokenized commodities rose 60% quarter over quarter to $4.7 billion.
The paradox is stark. Ethereum entered 2026 with more users, transactions, and institutional activity, but those gains have yet to translate into stronger financial results for the network or sustained demand for its native token. Total value locked across the ecosystem dropped 11% to $316.2 billion. Ethereum's fully diluted market value contracted 30.3% to $290 billion at quarter-end.
"Ethereum has become the default operating system for programmable finance and internet-native capital formation." — Joseph Chalom, chief executive of Ethereum treasury company SharpLink
