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Ethereum Foundation Invests $120M in DeFi, Shifts Away from ETH Sell-Offs

Coin WorldThursday, Feb 13, 2025 7:46 am ET

1min read

The Ethereum Foundation has made a significant move in the decentralized finance (DeFi) space by allocating 45,000 ETH, valued at approximately $120 million, into various liquidity protocols. This strategic allocation is a response to critical feedback regarding the foundation's past dependency on ETH sell-offs for operational funding, signaling a shift toward more sustainable financial management.

Aave's CEO, Stani Kulechov, referred to this move as the foundation's "biggest allocation in DeFi," emphasizing the shift toward enhanced liquidity in the DeFi ecosystem. The Ethereum Foundation has invested $120 million in DeFi protocols, addressing past criticisms of ETH sell-offs and signaling a sustainable approach to funding.

The Ethereum community has responded enthusiastically to the Foundation's recent deployment of 45,000 ETH, aimed at enhancing liquidity within well-known DeFi protocols like Aave, Spark, and Compound. This move is not just a financial allocation; it symbolizes a commitment to the growth of the DeFi sector after criticisms arose regarding the Foundation's past funding strategies.

The distribution breaks down as follows: 4,200 ETH was sent to Compound, 10,000 ETH to Spark, and 30,800 ETH to Aave. Given Ethereum's current price near $2,600, this allocation represents a substantial financial commitment to these platforms.

Industry stakeholders and community members celebrated the deployment. Mark Jeffrey, a notable podcaster, characterized the action as "smart," underscoring the central role that lending plays in DeFi and recognizing Aave as its "beating heart." Further comments from community members on social media suggest a growing belief that proactive measures like this could strengthen the ecosystem and reduce future reliance on selling ETH for operational costs.

Prior to this deployment, the Ethereum Foundation faced mounting criticisms for its practice of selling ETH to fund its operations, prompting public discontent and concerns over the foundation's sustainability measures. Ethereum Improvement Proposal (EIP-1559) co-creator Eric Conner pointedly remarked that the Foundation's primary activity seemed to be "dumping ETH." This highlights a broader concern about the potential negative impact of these sell-offs on ETH's market price.

Prominent figures in the community have suggested alternatives that could preserve E

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