The Ethereum Foundation’s New DeFi Venture
The Ethereum Foundation (EF) has embarked on a new venture within the decentralized finance (DeFi) landscape by securing a loan amounting to $2 million in GHO, a stablecoin created by Aave. This decision, revealed by Aave’s founder Stani Kulechov in a post on May 29, indicates a strategic shift towards integrating more DeFi methodologies into the foundation’s financial operations. Kulechov emphasized that this move not only reflects the EF’s role as a liquidity provider by supplying Ether to the Aave platform but also marks its participation as a borrower, creating what he described as
“the full DeFi circle.”
GHO is unique as it operates as an overcollateralized stablecoin managed by Aave’s decentralized autonomous organization (DAO), differentiating it from typical centralized stablecoins by allowing the community to determine interest rates and collateral policies.
Commitment to Advanced Treasury Management
This recent borrowing activity underscores the EF’s intensified commitment to adopting more advanced treasury management techniques within the DeFi ecosystem. While the foundation has not yet issued a comment regarding this development, its prior engagements with DeFi show a notable evolution in asset management philosophy. Earlier this year, the EF notably allocated $120 million across various DeFi protocols, including leading platforms like Aave, Spark, and Compound, investing 45,000 Ether into these systems. At the time, these Ether holdings were valued at approximately $120 million, highlighting what Kulechov termed the foundation’s
“biggest allocation in DeFi.”
This strategic maneuver has garnered encouragement from the community, fostering a positive sentiment regarding the EF’s management of its crypto assets.
Community Discussions and Criticisms
In contrast to this optimistic narrative, discussions within the Ethereum community had previously criticized the foundation’s actions regarding ETH sales for operational financing. Prominent voices, including Eric Conner, co-author of EIP-1559, questioned the foundation’s tendency to sell off Ether, suggesting the exploration of alternatives such as staking or utilizing DeFi resources to bolster finances. Anthony Sassano, host of the “Into the Ether” podcast, also suggested that the EF consider staking its Ether and then utilizing the rewards generated, or even borrowing through Aave as a prudent financial strategy.
The collective support for the EF’s latest steps into DeFi reveals a hopeful shift for the ecosystem as it navigates its financial future.
