The Ethereum Foundation has made a significant move by allocating $165.3 million to participate in the decentralized finance (DeFi) ecosystem, aiming to grow its treasury and enhance technical expertise.
Ethereum Foundation’s Bold Move into DeFi: A $165M Allocation
The Ethereum Foundation has made a significant move by allocating 50,000 ether (ETH) worth around $165.3 million to participate in the decentralized finance (DeFi) ecosystem.
Growing the Treasury through DeFi Participation
The allocation is aimed at potentially growing the Ethereum Foundation’s treasury after it shrunk by 39% in less than three years to $970.2 million as of October 31st. The nonprofit holds a significant portion of its assets in ether, which recently dropped to a four-year low against bitcoin.
Leadership Restructuring and DeFi Participation
The Ethereum Foundation is undergoing a leadership restructuring to enhance technical expertise, communication, and support for app builders. According to Vitalik Buterin, the organization has so far avoided staking its ETH to generate revenue through staking rewards over regulatory and neutrality concerns. However, at the current CESR Composite Ether Staking Rate, it would be able to generate a 3.31% yield on its ether holdings.
A New Era for the Ethereum Foundation
The move is part of a broader effort to improve the technical expertise within the Ethereum Foundation’s top brass, enhance communications and ties between its leadership and the Ethereum ecosystem’s actors, and more actively support app builders. Buterin emphasized that the Foundation is not looking to execute an ideological pivot or aggressively lobby regulators.
Initial Test Transaction Sent to Aave
An initial test transaction has been sent to the lending protocol Aave, one of the largest in the Ethereum ecosystem behind the liquid staking protocol Lido. The Ethereum Foundation will set up a 3-of-5 multisig wallet through Safe, which has proven safe and has a great user experience.
The move into DeFi marks an exciting new chapter for the Ethereum Foundation, and it will be interesting to see how this allocation impacts its treasury growth in the coming months.
