Ethereum Foundation Allocates $120M in ETH to DeFi Protocols

The Ethereum Foundation has allocated 45,000 ETH, valued at approximately $120 million, across four prominent DeFi protocols. This move comes as the foundation explores staking options, following intense community pressure to engage more with the DeFi ecosystem and manage its ETH holdings.

The foundation distributed the ETH across Aave Core (20,800 ETH), Spark (10,000 ETH), Aave Prime (10,000 ETH), and Compound (4,200 ETH). This allocation was met with positive reactions from the crypto community, who praised the foundation's decision to participate in DeFi.

Vitalik Buterin, the co-founder of Ethereum, addressed the community's concerns regarding the foundation's ETH sales and lack of ecosystem involvement. He acknowledged that the foundation had considered staking its ETH holdings or participating in DeFi but noted the challenge of maintaining neutrality during contentious hard forks. Staking would inherently align the foundation with one side of a fork, compromising its neutrality.

Following the debate surrounding the foundation's treasury management, Hsiao-Wei Wang, a key member of the EF Research team, announced the setup of a number of multisig wallets and the immediate allocation of 50,000 ETH to these wallets. The foundation's engagement with DeFi and its exploration of staking options signal a shift in its approach to treasury management and ecosystem involvement.