Ethereum Foundation Moves $167 Million in ETH to Support DeFi Participation
The Ethereum Foundation (EF) has announced the creation of a new multi-signature wallet to facilitate its participation in the decentralized finance (DeFi) ecosystem. The move follows recent scrutiny regarding the foundation's transparency and treasury management. The EF plans to initially transfer 50,000 ETH, worth over $167 million based on current market prices, to this new wallet. The transfer is expected to take several days to complete due to security protocols.
The announcement was made by Hsiao-Wei Wang, recently appointed to a leadership role at the foundation, via a post on X (formerly Twitter). Wang explained that the new wallet, secured by a 3-of-5 multi-signature setup using Safe, a crypto wallet company, will be used for DeFi activities. This decision comes after public discussion, including comments from Ethereum co-founders Vitalik Buterin and Joe Lubin, hinting at organizational changes within the EF.
Concerns regarding the EF's transparency, particularly its handling of its substantial ETH holdings, have been circulating within the cryptocurrency community. Critics have questioned the foundation’s lack of active participation in the Ethereum ecosystem, suggesting it has primarily used its holdings for operational expenses, such as salaries and grants, which some argue contributes to selling pressure on ETH. There have also been calls for the foundation to deploy some of its ETH into DeFi protocols like Aave, a decentralized finance protocol.
This isn't the first time the EF has faced community pressure. Last year, the foundation received backlash after researchers took on advisory roles with another project, raising concerns about potential conflicts of interest. The recent move to engage with DeFi has been met with mixed reactions. Some see it as a positive step towards greater involvement in the Ethereum ecosystem, while others remain cautious and await further details. The foundation’s engagement with DeFi is seen by some as a potential compromise between calls for greater transparency and active participation in the ecosystem.