Ethereum Foundation Unveils New Treasury Policy, Backs DeFi, and Restructures R&D
Jun 6
2 min read
The Ethereum Foundation (EF) has unveiled a significant overhaul of its treasury management and research and development strategies. This move aims to bolster the foundation's financial sustainability, increase transparency, and strategically invest in decentralized finance (DeFi) protocols, signaling a pivotal period for the Ethereum ecosystem.
Ethereum Foundation Unveils Strategic Financial Overhaul
The Ethereum Foundation has announced a new, more conservative treasury policy designed to ensure long-term financial stability and strategic growth. This policy introduces a disciplined financial framework, including a 2.5-year operating expense buffer and an annual spending cap of 15% of total treasury assets. The foundation plans to progressively reduce its annual operating expenses to 5% by 2030, aligning with endowment-based organizations.
Key aspects of the new treasury policy include:
Spending Linked to Reserves: Day-to-day expenses and cash requirements will now be directly tied to Ether (ETH) holdings and sales, with ETH sales occurring only if liquid reserves fall below the 2.5-year spending threshold.
Increased Transparency: The EF will publish detailed quarterly and annual reports, providing the community with insights into asset allocations, investment outcomes, and treasury performance.
DeFi-First Investment Strategy: The foundation will prioritize on-chain deployments within the DeFi ecosystem, focusing on "battle-tested, immutable, audited, permissionless protocols." Current strategies include solo staking and lending wrapped ETH (wETH) to established protocols, with future plans to explore vetted yield farming and tokenized real-world assets.
"Defipunk" Philosophy Guides Investments
Central to the new investment strategy is the introduction of the "Defipunk" evaluation framework. This philosophy, inspired by the cypherpunk movement, emphasizes:
Security
Open-source development
Financial self-sovereignty
Privacy
This framework will guide the EF's selection of initiatives and collaborations, ensuring investments align with Ethereum's core values of freedom, censorship resistance, and innovation.
Major R&D Restructuring and Critical Juncture
Alongside the treasury reforms, the Ethereum Foundation has undertaken a significant restructuring of its research and development operations. The Protocol Research & Development division has been rebranded simply as "Protocol," with a renewed focus on three strategic pillars:
Scale L1: Led by Tim Beiko and Ansgar Dietrichs.
Scale L2: Overseen by Alex Stokes and Francesco D'Amato.
Improve UX: Directed by Barnabé Monnot and Josh Rudolf.
This restructuring, which included some staff redundancies, aims to streamline efforts as Ethereum approaches what the foundation describes as a "pivotal" period, particularly in 2025-2026. The foundation believes that advancements in zero-knowledge Ethereum Virtual Machines (zkEVMs) and the maturation of Layer 2 solutions are preparing the "world computer" for planetary scale adoption. The strategic alignment of financial discipline and focused R&D is intended to navigate the challenges of scaling a global financial infrastructure while upholding decentralization and permissionless access.
Sources
Ethereum Foundation tightens treasury rules, Digital Watch Observatory.
Ethereum Foundation Unveils Conservative Treasury Strategy Amid Major R&D Restructuring, Blockhead.
Ethereum Foundation Unveils Treasury Plan To Support DeFi, FinanceFeeds.
Ethereum Foundation Sets New Treasury Rules Ahead of Critical 18 Months – The Shib Daily, The Shib Daily.
Ethereum Foundation Clarifies Treasury Policy, Bitcoinsensus.