Ethereum Foundation Reorganizes PR&D Team, Cuts Staff to Prioritize Scalability and User Experience

On June 2, the Ethereum Foundation has announced a significant restructuring of its research and development (R&D) team, including staff layoffs and a rebranding of its core development unit to “Protocol.” The move, detailed in recent announcements, is part of a strategic shift to address pressing challenges in Ethereum’s ecosystem, focusing on three key priorities: scaling the Ethereum base layer (Layer 1), expanding blobspace for data availability, and enhancing user experience (UX). This development comes as Ethereum continues to navigate the complexities of maintaining its position as a leading blockchain platform amid growing competition and community expectations.

A Strategic Pivot for Ethereum’s Future

The restructured Protocol team will zero in on scaling Ethereum’s base layer, a long-standing priority given the network’s recurring issues with high transaction fees and congestion. As Ethereum hosts over 54% of DeFi’s total value locked—approximately $113.3 billion as of press time, according to DeFiLlama—scaling Layer 1 is critical to supporting growing demand. The Foundation’s efforts will focus on optimizing the core protocol to handle higher transaction volumes without compromising decentralization or security.

Another key focus is expanding blobspace, introduced in the Dencun upgrade of March 2024. Blobspace, a feature of EIP-4844 (proto-danksharding), enables Layer 2 (L2) solutions like Arbitrum and Optimism to store data off-chain more efficiently, reducing costs for users. By increasing blobspace capacity, the Foundation aims to bolster L2 scalability, making Ethereum-based applications more cost-effective and competitive with rival blockchains.

User experience, the third priority, addresses Ethereum’s complexity, which has often deterred mainstream adoption. From intricate wallet setups to unpredictable gas fees, the Foundation is targeting improvements to make Ethereum more accessible. This includes simplifying interactions for developers building decentralized applications (dApps) and creating smoother onboarding processes for new users, aligning with industry-wide efforts to bridge Web3 with mainstream audiences.

Market Impact and Community Controversy

As of June 3, ETH is trading at around $2,600, up 4.3% in the past 24 hours, according to Coingecko. The restructuring announcement underscores Ethereum’s ongoing efforts to stay competitive. With over 4,000 active dApps and a robust developer community, Ethereum remains the leading smart contract platform. However, rising transaction volumes on L2s highlight the urgency of scaling solutions, which the Protocol team’s new mandate aims to address.

However, the restructuring has not been without controversy. Kyle Samani, co-founder of Multicoin Capital, criticized the Foundation’s approach on X. Samani argued that the term “focus” implies prioritization and reduction, not expansion, and suggested that the Foundation’s three stated goals—L1 scalability, blobspace expansion, and UX improvements—may conflict. “Objective 1 is at odds with 2, when considered through the lens of 3,” Samani commented.

What’s Next for Ethereum?

The Ethereum Foundation’s restructuring marks a pragmatic step toward addressing scalability and usability challenges. The Protocol team’s clear mandate—Layer 1 scaling, blobspace expansion, and UX improvements—signals a commitment to addressing the demands of widespread adoption. As Ethereum’s ecosystem grows, with over 437,000 daily active addresses in May, according to DefiLlama, the success of these initiatives will be critical to sustaining its leadership in the blockchain space. “This moment may be Ethereum’s best shot at deploying not only our technology, but our values, at planetary scale,” the Foundation said.

The coming months will reveal how effectively the restructured team executes its vision. With L2s thriving and user expectations rising, Ethereum’s ability to balance innovation with accessibility will shape its trajectory in an increasingly competitive market.