Ethereum Foundation says next 18 months ‘pivotal’ amid new treasury policy

The Ethereum Foundation is adopting a more structured and transparent treasury policy that ties operational costs and cash needs to its Ether reserves and sales to strengthen its financial position as it anticipates a pivotal 18 months ahead.

Its annual operating cost — measured as a percentage of the EF’s treasury — and the number of years of runway will be reassessed regularly, factoring in market dynamics and community input to ensure the foundation’s short-term operations remain aligned with its long-term strategy, one of the foundation’s directorssaidon June 4.

Hsiao-Wei Wang said the Ethereum Foundation currently only has 2.5 years before it runs out of cash, setting the stage for a crucial 18 months as it seeks to deploy resources more deliberately and provide more ecosystem support:

The tightened treasury policy follows community backlash over the EF’s unexpected EtherETH$2,610EthereumChange (24h)0.12%Market Cap$314.39BVolume (24h)$16.09BView Moresales in recent months, a series of moves which some critics claimed have undermined trust in the Foundation.

To uphold itstransparency commitment,the EF will publish quarterly and annual reports outlining its asset holdings, investment performance and any significant developments during each period.

As of Oct. 31, the foundation’s treasurytotaledapproximately $970.2 million, split between $788.7 million in crypto and $181.5 million in non-crypto assets.

Over 81% of the foundation’s total position was in ETH. Since then, ETH has fallen roughly 1.8%, CoinGeckodatashows.

Foundation to engage more with DeFi

The EF said it will aim to “earn acceptable returns” on treasury assets by engaging with permissionless protocols that are immutable and thoroughly audited.

This approach allows the EF to support protocols that champion what it calls “Defipunk principles” while strengthening its treasury position.

In February, theFoundation set aside 45,000 ETH— worth $120 million at the time — to deploy to various decentralized finance protocols.

It has already supplied ETH andborrowed $2 millionworth of the GHO (GHO) stablecoin from Aave’s lending protocol, Aave founder Stani Kulechov said on May 29.

Spark and Compound were among the other DeFi protocols that received support from the foundation.

Related:Ether poised for ‘significant breakout’ as ETH price strengthens vs BTC

The Ethereum Foundation historically refrained from supporting specific protocols to maintain credible neutrality and avoid favoring any projects. However, this stance drew criticism from some ecosystem innovators, including Infinex founder Kain Warwick, whoaccused the foundationof being anti-DeFi.

The EF also announced arestructuring of its internal development teamon June 2, which involved some members being laid off.

It didn’t disclose how many individuals were affected.

The changes come amid ETH’s underperformance this bull cycle, lagging behind the likes of BitcoinBTC$104,794BitcoinChange (24h)0.79%Market Cap$2.08TVolume (24h)$27.01BView Moreand SolanaSOL$153.45SolanaChange (24h)2.22%Market Cap$74.67BVolume (24h)$2.33BView More, which recently notched all-time highs. ETH, by contrast, remains 46.5% below its November 2021 peak of $4,878.

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