The Ethereum Foundation has announced a significant move to enhance its decentralized finance (DeFi) ecosystem, allocating 50,000 Ether (worth around $165 million) to support the development of Ethereum-based decentralized applications. This initiative comes as the foundation undergoes organizational changes aimed at providing more transparency and direct support to app builders, according to Ethereum co-founder Vitalik Buterin, who shared the update on X (formerly Twitter) on January 20.
We are indeed currently in the process of large changes to EF leadership structure, which has been ongoing for close to a year. Some of this has already been executed on and made public, and some is still in progress.
— vitalik.eth (@VitalikButerin) January 18, 2025
What we're trying to achieve is primarily the following…
The funds will be secured through a three-of-five multisig wallet on Safe, with the Ethereum Foundation’s Hsiao-Wei Wang confirming that a test transaction has already been successfully executed on the lending protocol Aave. Although the wallet setup is still underway, Wang noted that the process should be completed in the coming days.
Ethereum Foundation Treasury Update
— hww.eth (@icebearhww) January 20, 2025
The Ethereum Foundation (@ethereumfndn) has set up a new @safe 3-of-5 multisig wallet.
The wallet address is 0x9fC3dc011b461664c835F2527fffb1169b3C213e
An op has been initiated to send 50,000 ETH there, but be patient; due to signing delays,… pic.twitter.com/sIkAlH8ROf
This decision marks a crucial step as the Ethereum Foundation seeks to reinvigorate its treasury, which has seen a significant decline of 56% from 617,000 Ether in January 2020 to its current holding of 269,000 Ether, valued at approximately $894 million. The new allocation represents 18.5% of the foundation’s total Ether holdings and reflects an effort to grow its resources by tapping into the growing DeFi space.
However, the foundation’s strategy has faced criticism from some quarters. Infinix founder Kain Warwick has voiced concerns about the Ethereum Foundation’s perceived lack of engagement with the DeFi sector, while others have criticized its Ether sell pressure used to cover operational expenses. Eric Conner, a core Ethereum developer, proposed that staking rewards could potentially cover the foundation’s internal budget, alleviating some of the concerns about selling pressure.
Also Read: Ethereum Price Poised for Breakout – Will It Hit $5,000 or Face a Bearish Reversal?
Despite criticism, Buterin has emphasized that the foundation’s focus remains on fostering decentralized innovation, rather than lobbying regulators or shifting its ideological stance. This approach has garnered support from industry figures such as CryptoQuant CEO Ki Young Ju, who praised the foundation for prioritizing value creation over profit in a time when memecoin ventures dominate headlines.
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