The Ethereum Foundation has announced a major update to its treasury strategy, aiming to support the growth of decentralized finance (DeFi) while gradually reducing its yearly spending. This move reflects the foundation’s long-term vision for Ethereum’s future, aligning its financial management with the values of the on-chain ecosystem it helped build.
As part of the new plan, the foundation will reduce its annual spending from 15% of its total assets to just 5% by 2030. It will also begin investing a portion of its treasury directly into DeFi protocols. These investments are expected to bring steady returns while staying true to Ethereum’s core values.
To make the strategy more sustainable, the Ethereum Foundation will follow a rule-based system for converting its Ethereum (ETH) holdings into cash. The rule ensures that ETH will only be sold when cash reserves fall below a set safety buffer — equal to 2.5 years’ worth of operating expenses, or around 37.5% of the treasury. This means ETH sales will be planned and predictable, instead of reactive or sudden.
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Each quarter, the foundation will calculate how much cash it needs and sell just enough ETH to cover those needs. These sales could happen through centralized exchanges or on-chain swaps. The idea is to maintain a healthy cash runway without disrupting the market or Ethereum’s price.
Hsiao-Wei Wang, co-executive director at the foundation, explained that this approach creates a clear path for lower spending while maintaining strong support for Ethereum’s development. “The foundation expects to stay involved for the long term but will likely narrow its role over time,” she said.
In addition to its financial changes, the foundation also introduced a new concept called “Defipunk.” Inspired by the Cypherpunk movement of the 1990s, Defipunk blends privacy-focused ideals with the power of decentralized finance. The Cypherpunk Manifesto, written by Eric Hughes in 1993, emphasized the need for privacy through cryptography and individual action rather than relying on institutions.
The Ethereum Foundation believes these ideas are still highly relevant today. It argues that privacy in DeFi must become a shared goal, supported by strong early action from organizations like itself. Wang added that privacy tools have been underfunded despite their importance, and that institutional support can help change that.
By aligning its spending, investments, and values, the Ethereum Foundation is setting a new standard for how blockchain projects manage their resources. Its strategy is designed not just to preserve the treasury, but also to build a stronger, more private, and decentralized future through Ethereum and DeFi.
