Ethereum Foundation Doubles Down on DeFi With New Treasury Policy
The Ethereum Foundation just dropped a bombshell—its first formal treasury policy, and it's betting big on decentralized finance. No more vague promises—this is a full-throated endorsement of DeFi's role in Ethereum's future.
Treasury goes chain-native
Gone are the days of conservative balance sheet management. The Foundation's moving its reserves into smart contracts, yield strategies, and—of course—its own ecosystem's tokens. Because nothing says 'skin in the game' like eating your own cooking.
Wall Street won't like this
While traditional finance clings to its spreadsheets, Ethereum's putting money where its mouth is—on-chain. The policy reads like a middle finger to legacy systems, with automated execution replacing human committees. Just don't mention that time DeFi protocols got drained faster than a hedge fund's credibility.
Ethereum Foundation reforms treasury plans
The Ethereum Foundation has introduced a set of treasury policies designed to help it maintain its role in strengthening the Ethereum network. The policies focus on reforming its operation and other key aspects including spending, yield generation, transparency and cypherpunk goals.
EF stated that 2025-2026 are "likely to be pivotal for Ethereum," which has led to a higher focus on short-term deliverables. It plans to gradually narrow its spending from a 15% target over 2.5 years to a 5% baseline over the next five years.
The Foundation also noted that it will leverage part of its crypto-denominated treasury assets to earn yields through ETH staking and lending & borrowing across DeFi protocols that align with Ethereum's values. The process will be based on key requirements, including safety and security, as well as risk and reward. The goal is to support DeFi projects on the network while also generating returns.
"We will frequently reallocate funds between protocols for reasons such as changing market conditions, diversification, or new yield opportunities," Hsiao-Wei Wang, the EF co-executive director wrote in a blog post on Wednesday.
The Foundation had earlier deployed about 45,000 ETH across Aave, Compound and Spark Protocol in February to kickstart the process.
Meanwhile, its fiat-based assets will be held in liquid cash for the day-to-day operation of the Foundation, as well as in fixed-term deposits, bonds, and tokenized real-world assets (RWAs).
The EF's Finance team is also tasked with producing structured quarterly and annual reports detailing the organization's key activities, performance, and treasury allocations.
Additionally, the EF aims to deepen its commitment to cypherpunk ideals through a new framework called "Defipunk." The approach aims to maintain Core DeFi principles across Ethereum protocols through a set of guidelines, including privacy, security, free-libre and open-source software (FLOSS), self custody, distributed user interfaces and maximally trustless core logic.
The Foundation also highlighted that it will give more attention to researching and advancing works on privacy, as it's a key challenge that DeFi protocols have yet to solve.
The treasury policy comes amid changes at the EF following the appointment of Tomasz Stańczak and Hsiao-Wei Wang as co-executive directors in March. The Foundation earlier announced a restructuring and rebranding of its Protocol Research and Development (PR&D) team to "Protocol" on Monday.
