The Ethereum Foundation (EF) has introduced a structured and transparent treasury policy aimed at bolstering its financial health as it anticipates a crucial 18 months ahead. The foundation plans to regularly reassess its annual operating costs in relation to its Ether (ETH) reserves and cash requirements. Hsiao-Wei Wang, one of the EF directors, emphasized that the foundation currently has only 2.5 years of cash remaining, marking a critical phase for resource allocation and ecosystem support. "This policy reflects our conviction that 2025-26 are likely to be pivotal for Ethereum, warranting enhanced focus on critical deliverables," Wang mentioned.
The new treasury policy comes after recent criticism from the community regarding unexpected Ether sales that some stakeholders felt undermined trust in the foundation. To address this concern, the EF promised more transparency by publishing quarterly and annual reports that will detail its asset holdings and investment performance. As of October 31, the EF's treasury was valued at approximately $970.2 million, with over 81% held in ETH, despite the cryptocurrency's 1.8% price dip since that date.
The foundation is also shifting its strategy towards engaging with decentralized finance (DeFi) protocols. It aims to "earn acceptable returns" on its treasury by collaborating with thoroughly audited and permissionless platforms. In February, the EF allocated 45,000 ETH for deployment across various DeFi projects and has already engaged with Aave, amongst others, to further its treasury goals. Historically, the EF refrained from backing specific protocols to remain neutral, but growing criticism from community innovators prompted this change.
Additionally, the EF has initiated an internal reorganization, which involved layoffs, although the exact number of affected employees was not disclosed. These changes occur against a backdrop of Ethereum’s relative underperformance compared to competitors like Bitcoin and Solana, which have reached new highs while ETH remains 46.5% below its November 2021 peak.
The new treasury policy comes after recent criticism from the community regarding unexpected Ether sales that some stakeholders felt undermined trust in the foundation. To address this concern, the EF promised more transparency by publishing quarterly and annual reports that will detail its asset holdings and investment performance. As of October 31, the EF's treasury was valued at approximately $970.2 million, with over 81% held in ETH, despite the cryptocurrency's 1.8% price dip since that date.
The foundation is also shifting its strategy towards engaging with decentralized finance (DeFi) protocols. It aims to "earn acceptable returns" on its treasury by collaborating with thoroughly audited and permissionless platforms. In February, the EF allocated 45,000 ETH for deployment across various DeFi projects and has already engaged with Aave, amongst others, to further its treasury goals. Historically, the EF refrained from backing specific protocols to remain neutral, but growing criticism from community innovators prompted this change.
Additionally, the EF has initiated an internal reorganization, which involved layoffs, although the exact number of affected employees was not disclosed. These changes occur against a backdrop of Ethereum’s relative underperformance compared to competitors like Bitcoin and Solana, which have reached new highs while ETH remains 46.5% below its November 2021 peak.
