Ethereum Foundation deploys $120M to DeFi apps; community celebrates

The Ethereum Foundation allocated $120 million of Ether to decentralized finance (DeFi) protocols, responding to community concerns about the foundation’s reliance on ETH sell-offs for funding.

On Feb. 13, the Ethereum Foundation’s multisignature address deposited 4,200 Ether (ETH) into Compound, 10,000 ETH into Spark and 30,800 ETH into Aave. With ETH hovering at around $2,600, the total value of the 45,000 ETH deployed was about $120.4 million. 

Aave founder and CEO Stani Kulechov said the 30,800 ETH (about $82.4 million) deployed into Aave Prime and Aave Core is the Ethereum Foundation’s “biggest allocation in DeFi.” Kulechov also said, “DeFi will win,” expressing optimism as the foundation added liquidity to Aave.  

Apart from Kulechov, many community members celebrated the move, as it may reduce the need for the foundation to dump ETH to secure funds for expenses. 

Related: Ethereum Foundation infighting and drop in DApp volumes put cloud over ETH price

Community celebrates Ethereum Foundation’s $120 million deployment

Podcaster Mark Jeffrey described the move as “smart,” saying that lending is the beating heart of DeFi and Aave is the “beating heart of lending.”  

An X user saw the development as a win, encouraging the community by saying what they were doing was working and that they had to “keep it up.” Meanwhile, another user said it would be “a positive thing” if the Ethereum Foundation continued to use their funds in this manner. 

0xNessus, the pseudonymous co-founder of lending protocol HyperLend, said it was crazy that the foundation only just started engaging with DeFi apps after many years. “All we had to do was bully them,” the executive wrote on X. 

Ethereum Foundation’s ETH selling invites criticisms

In January, many called out the Ethereum Foundation for selling ETH to cover its operating expenses and pay its staff. 

Ethereum Improvement Proposal (EIP-1559) co-author Eric Conner said the foundation’s No. 1 use case was “dumping ETH.” At the same time, Anthony Sassano, host of The Daily Gwei, suggested using Aave to stake and borrow stables against their ETH instead of directly selling their crypto assets, which many consider detrimental to its price. 

Vitalik Buterin previously addressed concerns about the foundation staking its ETH, citing regulatory uncertainty and the possibility of being forced into a stance on potential Ethereum hard forks.

Despite this, the Ethereum Foundation posted that there’s “more to come,” implying that the fund deployment will not be its last. The organization added that it’s already looking into staking and asking community members for suggestions.  

Magazine: Ethereum L2s will be interoperable ‘within months’: Complete guide