The Ethereum Foundation (EF) is making strategic changes to its spending and investment approach as it enters a critical 18-month period. In an effort to better manage funds and prepare for future challenges, EF has introduced a new treasury policy.
Under this new plan, EF will align its operating costs and runway with its holdings of ETH, regularly reassessing its financial position. Hsiao-Wei Wang of EF emphasized the importance of deliberate capital deployment moving forward, noting that the current treasury provides about 2.5 years of runway.
As part of this shift, EF will now leverage its treasury assets in audited DeFi protocols such as Aave, generating yield and actively participating in the Ethereum ecosystem. This approach, as highlighted by OAK Research, is seen as a positive development for ETH as it reduces the need to sell tokens while supporting secure, open-source decentralized applications. EF has already engaged in lending ETH and borrowing stablecoins from Aave, with potential exploration of Real World Assets (RWAs) through platforms like Securitize.
While ETH sales may still occur quarterly based on fiat needs, EF plans to do so less aggressively now that DeFi income streams are active. Additionally, the foundation is considering diversifying its fiat reserves into low-risk instruments like Treasury bills and bonds. To enhance transparency and maintain community trust, EF will publish quarterly reports detailing asset performance, positions, and major events.
With ETH currently trading 46% below its 2021 high and trailing behind other cryptocurrencies like BTC and SOL, EF’s revamped strategy underscores its commitment to the long-term growth of Ethereum. By actively supporting DeFi principles and ecosystem builders, the foundation is laying the groundwork for the next phase of Ethereum’s development.
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