Ethereum Foundation Announces New Treasury Policy Amid Community Scrutiny

The Ethereum Foundation has announced a new treasury management policy aimed at extending its operational runway and enhancing transparency. This move comes as the Foundation faces scrutiny over its financial stewardship and commitment to decentralization. The new policy will tie the Foundation's operational costs and liquidity needs to its Ether (ETH) holdings, providing a buffer against market volatility and ensuring flexibility in leaner market conditions. Key financial metrics, such as the percentage of ETH reserved for operations and years of projected runway, will be reassessed regularly based on market dynamics and community feedback.

This shift towards transparency follows community backlash over surprise ETH sales in late 2024 and early 2025, which raised questions about the Foundation's intentions. To address these concerns, the Ethereum Foundation will begin publishing quarterly and annual reports detailing treasury holdings, investment activity, and any significant changes to its financial outlook. As of October 31, 2024, the Foundation's treasury stood at $970.2 million, with $788.7 million held in crypto and $181.5 million in non-crypto assets. Notably, 81% of the crypto portion was denominated in ETH.

The Foundation is also looking to extract sustainable yield from its treasury through deeper engagement with decentralized finance (DeFi). In February 2025, the Foundation earmarked 45,000 ETH (approximately $120 million) to be deployed across selected DeFi platforms. By late May, Aave founder Stani Kulechov confirmed that the Foundation had already supplied liquidity and borrowed $2 million in GHO stablecoins through Aave’s lending platform. Other supported protocols include Spark and Compound, signaling the Foundation's strategic diversification into multiple DeFi ecosystems.

This increased participation in DeFi comes after criticism from leading DeFi developers who accused the Foundation of being "anti-DeFi" for its hands-off approach to funding protocol-level innovation. The Foundation's tightened fiscal approach coincides with internal restructuring, including layoffs of several members of its internal development team. Despite Ethereum's central role in the broader blockchain ecosystem, ETH has significantly underperformed relative to peers during the current bull market, intensifying calls for the Foundation to accelerate innovation and better allocate its resources.

Meanwhile, WisdomTree’s Ethereum-based money market fund, WTGXX, has reached $300 million in assets under management (AUM), reflecting growing confidence in decentralized finance among institutional investors. Launched as a blockchain-native alternative to conventional savings and government money market accounts, WTGXX blends time-tested investment strategies with the benefits of decentralized infrastructure. The fund is fully backed by US government securities and utilizes the Ethereum blockchain for transparency, security, and accessibility.

WTGXX's success highlights the viability of decentralized asset management and could inspire a wave of similar products from both traditional asset managers and crypto-native firms. The fund's appeal lies in its structure: decentralized and more inclusive than traditional savings options, yet backed by the same government instruments that form the backbone of many conventional portfolios. As traditional yields remain under pressure, many investors are seeking out blockchain-based instruments like WTGXX for their combination of reliability and potential for higher returns.

WTGXX operates entirely on Ethereum, leveraging its decentralized network for transparency in asset tracking, immutability in record-keeping, and programmability for compliance and automation. The fund's holdings—US Treasury securities—are tokenized and secured on-chain, allowing near-instant settlement, real-time auditing, and a level of accessibility impossible in legacy financial systems. WisdomTree’s success could mark the start of a long-term trend, with more financial companies expected to launch tokenized offerings on Ethereum or similar networks in the coming years.