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Ethereum Foundation to Convert Reserves Only If Needed
Ethereum Foundation– The Ethereum Foundation has introduced a new treasury policy aimed at modernizing how it manages and deploys its reserves. The initiative is designed to better align with Ethereum’s decentralized ethos while preparing for a sustainable long-term future.
Spending Cuts and a Rule-Based Approach
The policy outlines a sharp reduction in annual spending—from 15% of assets today to just 5% by 2030. According to Hsiao-Wei Wang, co-executive director of the Foundation, this change formalizes “a lower spending trajectory and a rule-based approach” for managing Ethereum reserves.
We plan to build a predictable glide path and baseline toward spending.
To maintain operational sustainability, the Foundation will only convert ETH to fiat when cash reserves drop below 2.5 years’ worth of expenses—approximately 37.5% of the total treasury. These conversions will be done quarterly through exchanges or on-chain swaps.
Putting the Treasury to Work in DeFi
A significant shift also involves using parts of the treasury within decentralized finance protocols to generate returns.
earn acceptable returns on treasury assets while staying consistent with Ethereum’s underlying principles.
Embracing “Defipunk” Ideals
In a notable cultural shift, the Foundation introduced the term “Defipunk,” a nod to the cypherpunk movement. It reflects an effort to apply the original values of privacy, decentralization, and open-source development to Ethereum and the broader DeFi space.
The idea draws inspiration from Eric Hughes’ 1993 Cypherpunk Manifesto, which emphasized privacy through code and cryptography, rather than dependence on centralized authorities.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
