Ethereum Foundation Sets Up Alternative Account For DeFi Participation

A recent action from the Ethereum Foundation suggests that the organization is taking its Decentralized Finance (DeFi) move quite seriously.

According to a post on X, the Ethereum Foundation has established a new 3-of-5 multisig wallet with the address “0x9fC3…3C213e.”

This will serve as the alternative account for the Foundation to participate in DeFi and grow its treasury.

Ethereum Foundation Account Setup, Aave Trial

Markedly, 50,000 ETH has been allocated to this wallet per the update from hww.eth, one of the foundation’s staff.

At Ethereum’s current price of $3,329.57, this allocation is valued at approximately $166.45 million. Also, an initial test transaction was sent to the lending protocol Aave.

This is one of the largest DeFi protocols in the Ethereum ecosystem. It ranks alongside other top protocols like liquid staking protocol Lido.

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In less than three years, the Ethereum Foundation’s treasury has shrunk by 39%, reaching $970.2 million as of Oct. 31.

DeFi participation could re-ignite the recovery of the treasury. As it stands, the major portion of the Ethereum Foundation’s treasury is held in ETH.

For the longest time, the organization avoided staking as best as possible. This decision was not due to its lack of interest but for fear of regulatory and neutrality concerns.

Several Ethereum enthusiasts said they wish the Foundation were more involved with the ecosystem through staking.

Genesis of the ETH Staking Participation

Based on the current CESR Composite Ether Staking Rate, the Ethereum Foundation could get up to 3.31% as the yield on its ETH holdings. It avoided this reward for regulatory sake.

Regarding neutrality, Ethereum co-founder Vitalik Buterin noted that staking will force the Ethereum Foundation to choose the correct chain.

This is like a hard fork on the network, where two chains compete to be seen as correct.

In this instance, the foundation would be left with no option but to choose a chain to avoid the risk of slashing.

Even Tim Beiko, who runs the core protocol meetings at the Ethereum Foundation, said,

“I’m all for using the chain and staking when it makes sense (and am a big fan of the EF’s Client Incentive Program for this reason,) but staking wouldn’t cover all EF spending, and [in my opinion] it’d be reckless to lever up on the ETH treasury to cover payroll.”

The Foundation is now making the staking move because the regulatory risks have recently declined. Still, the Ethereum Foundation is seeking alternatives to reduce the other concerns.

ETH Price and Impact on Valuation

Ethereum’s price has dropped slightly despite the Donald Trump inauguration hype

At the time of writing, Ethereum’s price was changing hands for $3,317.20, up 2.37% in 24 hours

Institutions are already displaying a vote of confidence through their huge bet on Ethereum’s long-term value proposition.

On Monday, Trump’s World Liberty, a major institutional player, spent $20 million in USDC to acquire 6,041 ETH. The project stacked these coins for an average price of $3,311

Meanwhile, the nonprofit is working on implementing some structural changes in its leadership. The process “has been ongoing for close to a year,” according to Buterin.

With the new leaders, the foundation hopes to improve the technical expertise within the Ethereum Foundation’s top brass.

Ultimately, this can improve communication and ties between its leadership and the stakeholders in the Ethereum ecosystem.

All these may push positivity in the outlook of Ethereum, impacting its price growth in the long term.