Ethereum Foundation Invests $120M Worth of ETH Into DeFi

Key Points:

• Ethereum Foundation allocated 45,000 ETH (worth $120M) into Aave, Spark, and Compound to earn passive yield through DeFi rather than selling assets.
• This move follows community pressure urging the foundation to utilize its holdings more effectively instead of selling ETH.

Ethereum Foundation invests 45,000 ETH into DeFi lending protocols, responding to community demands to generate yield without liquidating assets.

Ethereum Foundation Allocates 45,000 ETH to DeFi

Facing growing pressure from the community, the Ethereum Foundation (EF) has made a strategic move to strengthen Ethereum's DeFi ecosystem.

The foundation recently invested 45,000 ETH ($120M) into leading DeFi lending protocols, including Aave, Spark, and Compound, aiming to generate passive income instead of liquidating its holdings.

The fund allocation includes 30,800 ETH ($82M) into Aave, with 20,800 ETH placed in the core market and 10,000 ETH in Aave Prime. 10,000 ETH ($26.8M) into Spark, a MakerDAO-affiliated lending platform. 4,200 ETH ($11.2M) into Compound.

This strategic deposit enables the foundation to earn an estimated $1.5M annually, based on a 1.5% supply rate.

Read more: Ethereum Foundation Grant Transfers 220.452 ETH to BuidlGuidl

Community-Driven Change: EF Shifts Away from ETH Sales

This move comes after months of community backlash over the Ethereum Foundation’s continuous ETH sell-offs to fund operations. Critics questioned why EF was liquidating assets instead of leveraging DeFi strategies to maximize treasury growth.

In response, Vitalik Buterin pledged “major changes” in EF’s financial strategy, hinting at staking and DeFi integration as alternatives to selling ETH. Last month, 50,000 ETH was moved to a multi-sig wallet, signaling a shift in approach.

The Ethereum community has welcomed this change, with Vitalik Buterin acknowledging the move by sharing a message "welcome 45k ETH to the defi machine."