Ethereum Foundation suspends Ecosystem Support Program for strategic shift

On August 29, 2025, the Ethereum Foundation announced the suspension of public grant applications for its Ecosystem Support Program (ESP). This decision marks a significant adjustment in the Foundation’s funding strategy, aiming to shift from a reactive approach to proactively targeting high-impact projects, in order to better adapt to the rapid growth and increasing complexity of the Ethereum network. According to the latest announcement on the Ethereum Foundation’s official blog, this suspension will not affect support for existing grant projects, but will free up resources for the Foundation, optimize internal processes, and lead to the publication of detailed strategic priorities in Q4 2025. This move has sparked widespread discussion within the community and is seen as a signal of the Ethereum ecosystem’s transition towards greater efficiency and sustainability.

Evolution of the Ecosystem Support Program and Reasons for Suspension

The Ecosystem Support Program originated from the grant initiative launched by the Ethereum Foundation in 2018, initially aimed at providing funding for open-source projects that drive Ethereum’s growth. Over time, the program has evolved into a comprehensive support mechanism covering areas such as developer tools, research, community building, and infrastructure. In 2024, the Ecosystem Support Program distributed nearly $3 million in grants to 105 projects through its public application channel. These projects included developer tool Commit-Boost, data analytics tool BundleBear, educational project Web3Bridge, zero-knowledge proof research ZK Playbook, and community event Ethereum Cypherpunk Congress. These grants not only fostered technological innovation within Ethereum but also strengthened the construction of public goods in the ecosystem.

However, as the Ethereum ecosystem expanded, the Ecosystem Support Program faced resource bottlenecks. The Ethereum Foundation noted in its announcement that the team is relatively lean, while the volume of public applications surged, causing most of the time and resources to be consumed by reviews, thus limiting the Foundation’s ability to explore new strategic opportunities. This suspension is intended to address these challenges: the Ethereum Foundation plans to keep annual expenditures within 5% of the Ethereum treasury and shift from a “reactive model” to a “proactive model,” aligning more closely with the priorities of other Ethereum Foundation teams. “This change will give us time to reorganize and allow us to focus on strategic initiatives, while also considering the priorities of other Ethereum Foundation teams,” stated the Ecosystem Support Program team in the official statement.

This adjustment is not an isolated event, but part of a broader restructuring of the Ethereum Foundation. As early as June 2025, the Ethereum Foundation underwent internal structural adjustments, including layoffs in core teams, to improve operational efficiency. In addition, the Foundation recently denied rumors of a $12.8 million sale related to an old ICO wallet, further emphasizing its prudent approach to fund management. These moves reflect the Ethereum Foundation’s efforts to balance innovation and sustainability, especially as Ethereum’s market cap exceeds $500 billions, DeFi total value locked (TVL) reaches $91 billions, and stablecoin market cap stands at $148 billions.

Community Response and Ongoing Support

The community’s response to this suspension has been diverse. Existing grantees will continue to receive support, including funding and non-financial assistance such as guidance, project feedback, and resource connections provided through “Office Hours.” The Ethereum Foundation emphasized that the suspension only applies to new public applications, and funding opportunities from other Foundation teams remain unaffected. On the X (formerly Twitter) platform, the official post by @EF_ESP sparked heated discussion. Some developers welcomed this “evolution,” believing it would allow funding to more precisely target key areas such as infrastructure and Layer 2 interoperability; others expressed concern that it might intensify competition for early-stage project funding, especially for developers in underdeveloped regions.

Related discussions on the X platform show that the community is generally optimistic. For example, accounts like @cryptonews and @ethdaily reposted the announcement, highlighting that it would “better support Ethereum’s growth.” Some users, such as @memesmetax, pointed out that this would shift from “reviewing every application” to a “targeted model,” prioritizing ecosystem pain points. However, there were also broader criticisms, such as @phil_uplc questioning the direction of the Ethereum Foundation’s leadership, though these voices were more about the overall ecosystem rather than the specifics of the Ecosystem Support Program. Overall, the market reaction was mild, with Ethereum (ETH) prices stabilizing around $4,390 after the announcement, and a market cap of about $530 billions.

Strategic Impact and Market Outlook

This transformation echoes global blockchain trends. The CoinCu research team pointed out that foundations like Tezos and Polkadot have improved grant efficiency and driven ecosystem innovation through strategic restructuring. The Ethereum Foundation’s adjustment may foster more innovative partnerships, especially in DeFi, Layer 2 applications, and infrastructure, and is expected to significantly impact Ethereum’s long-term growth. Analysts predict that the new model will focus more on selective funding, similar to a long-term allocation framework, targeting structurally underserved areas. In the short term, developers can turn to Gitcoin rounds, DAO funding, or developer collectives as alternatives.

From a market data perspective, Ethereum’s resilience is evident. Despite BlackRock’s ETH ETF experiencing a net outflow of $37.5 million (equivalent to 102,000 ETH) in August, overall demand remains strong, with institutions like BlackRock absorbing the equivalent of 52 days’ issuance of ETH per week. The Ethereum Foundation’s strategic pause is seen as a positive signal for optimizing resources and reducing the “burn rate,” helping Ethereum maintain its lead in a highly competitive environment.

Sustainable Growth of the Ethereum Ecosystem

This strategic pause by the Ethereum Foundation is not only an upgrade of the funding model but also a milestone in the ecosystem’s transition towards maturity. It will activate more high-impact projects and drive comprehensive innovation from developer tools to open standards. The new priority announcement in Q4 2025 is highly anticipated and is expected to focus on network scalability, interoperability, and community resources. “Our commitment to supporting the Ethereum ecosystem and maintaining its public goods remains unchanged,” the Ecosystem Support Program team reiterated. Amid the global Web3 wave, this adjustment will help Ethereum consolidate its leadership as a DeFi and smart contract platform and usher in a more dynamic development phase.