Ethereum Foundation Charts Fresh Course to Safeguard ETH Holdings
The Ethereum Foundation (EF) has announced a renewed strategy to manage its financial reserves, aiming to secure its position as a long-term supporter of the Ethereum ecosystem. This move was outlined in a blog post on 4 June, where the Foundation revealed a refined policy designed to sustain its operational needs while also aligning with Ethereum’s core principles.
Under the new plan, EF will set aside 15 per cent of its total treasury annually to fund its day-to-day operations. In addition to this, it will maintain a financial buffer equivalent to two and a half years of expenses. This cushion will allow the Foundation to operate without interruption, even during turbulent market conditions.
According to the policy, the Foundation will determine how much ETH to sell based on its treasury targets. This means EF will calculate how its fiat reserves compare to its spending needs and make sales accordingly. These ETH sales will take place at regular intervals and will depend on current financial conditions and strategic priorities.
Image 1: Ethereum (Source: Unsplash)
Supporting the Ecosystem Without Compromise
While the Foundation’s main focus is to remain financially sustainable, its leadership is also keen to ensure that its investments are aligned with Ethereum’s broader mission. Vitalik Buterin, Ethereum co-founder, along with other key contributors like Tim Beiko and Yoav Weiss, helped shape the guidelines, which stress that all financial activities must support Ethereum’s decentralised ethos.
Rather than chasing high-risk, short-term profits, EF intends to direct its funds into stable, transparent, and community-friendly projects. The Foundation favours DeFi platforms that are well-audited, immutable, and resistant to central control. These projects should also contribute to the overall health of the Ethereum network, not create new vulnerabilities.
To reduce risk, the Foundation aims to diversify its crypto exposure. This includes allocating ETH into long-term strategies such as solo staking, and using wrapped ETH (wETH) in lending protocols with a proven track record. Some of the ETH may also be used in slightly riskier DeFi
The policy also outlines plans to support newer forms of digital finance, such as tokenised real-world assets, by carefully integrating them into the Foundation’s broader fiat reserves. These assets are reviewed against strict criteria for risk, liquidity, and alignment with the Foundation’s values.
Combining Traditional and Crypto Finance
The Foundation’s treasury is not limited to digital assets. It also includes fiat-based instruments such as cash, government bonds, and fixed-term deposits. These serve immediate and strategies, but only after detailed assessments by internal advisors.
longer-term needs, offering a level of stability that complements more volatile crypto holdings.
Management of the treasury is overseen by EF’s board and executive directors. They are supported by a dedicated finance team, which prepares detailed quarterly updates. These reports outline performance data, asset positions, and significant events that impact the treasury. An annual report provides a broader breakdown, including how much of the treasury is held in cash, idle ETH, and deployed ETH.
This structured reporting process ensures that the Foundation remains accountable and transparent, both to its board and to the wider Ethereum community.
Image 2: (Source: Unsplash)
Pushing Forward Privacy and Open Finance
EF’s new approach also reflects a deeper commitment to privacy and digital self-sovereignty. Several Foundation contributors, including Dankrad Feist and Fredrik Svantes, have been vocal in encouraging support for protocols that prioritise privacy, autonomy, and open access.
Through a framework it calls “Defipunk,” the Foundation aims to support projects that reflect Ethereum’s original ideals. This includes funding systems that are permissionless, don’t rely on intermediaries, and use cryptography to protect user rights. Privacy, the Foundation notes, is essential for securing users against both online surveillance and real-world risks.
As part of this commitment, EF plans to improve its own internal systems. Staff responsible for treasury operations are encouraged to use open-source, privacy-first tools where possible. The goal is to lead by example, using the same values in day-to-day operations that EF promotes across the ecosystem.
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The Foundation has also created a set of internal benchmarks to assess which projects qualify for support. These include permissionless design, self-custody options, public source code, strong security measures, and decentralised interfaces. Projects don’t need to meet every criterion from the start, but they must show clear intent to improve over time.
