Ethereum Foundation Introduces Updated Treasury Plan to Safeguard Its ETH Holdings

The Ethereum Foundation has introduced a revised treasury strategy designed to safeguard its ETH holdings while ensuring financial stability over a 2.5-year period. This strategy includes a target to limit expenditures to 5% annually.

This approach emphasizes transparency, operational effectiveness, and adherence to the enduring principles of the blockchain.

The Treasury Strategy

In a recent announcement, the Foundation detailed its intention to allocate 15% of its annual treasury to cover operating costs, while ensuring a reserve sizable enough to support two and a half years of expenditure.

According to this strategy, ETH will only be liquidated if the reserves fall below this established benchmark. The organization will evaluate reserve levels each quarter to decide if asset sales are warranted, thereby reinforcing treasury stability amidst market volatility.

“We plan to gradually decrease annual operational expenses over the next five years, ultimately reaching a steady 5% baseline typical for endowment organizations,” stated the announcement.

This policy is based on the belief that the years 2025-2026 will be crucial for Ethereum, necessitating targeted investment in important developments.

“We will regularly adjust fund allocations across protocols based on market dynamics, diversification needs, or new earning opportunities,” the Foundation noted, emphasizing that withdrawals should not be misconstrued as negative assessments.

The non-profit organization aims to develop and oversee its treasury through secure, permissionless, and regularly audited DeFi systems. This initiative will involve independently staking ETH and lending wrapped ETH via established DeFi platforms, with periodic portfolio diversification planned, including converting some assets to fiat.

Defipunk Philosophy

A newly adopted principle known as “Defipunk” is integral to this financial strategy. Inspired by the early cypherpunk movement, it emphasizes the core values of decentralization, financial privacy, and open-source innovation.

This philosophy will guide the Foundation’s decision-making as it chooses projects and partnerships for funding. Financial resources will be allocated to teams that align with these values, fostering a DeFi ecosystem grounded in freedom, anti-censorship, and innovative progress.