Ethereum Foundation Enters DeFi Landscape

Amid a period of public scrutiny, the Ethereum Foundation has announced the establishment of a wallet address to commence its participation in the DeFi ecosystem. This move confirms a recent statement from Vitalik Buterin regarding ongoing organizational changes within the non-profit. The foundation plans to seed this wallet with approximately $150 million worth of ETH, though it may take a few days to set up.

> “The Ethereum Foundation has set up a new Safe 3-of-5 multisig wallet … An op has been initiated to send 50,000 ETH there, but be patient; due to signing delays, this will take a few days to process,” posted Hsiao-Wei Wang, recently appointed to a leadership role at the foundation. “The Ethereum Foundation will use this new wallet to participate in the DeFi ecosystem.”

There has been longstanding concern over Ethereum Foundation’s transparency, particularly regarding its treasury management. In recent weeks, several high-profile crypto commentators have raised concerns about the organization and its leadership, partly due to ETH’s underperformance in the market and growing competition from rival chain Solana.

Suggestions have emerged proposing a potential change in leadership, including replacing executive director Aya Miyaguchi with former Ethereum researcher Danny Ryan, who led the blockchain’s proof-of-stake upgrade. There have also been calls for the foundation to stake or deploy a portion of its estimated $1 billion ETH holdings on-chain. The foundation has faced criticism for creating “sell pressure” on ETH by converting its holdings into stablecoins to pay salaries.

In response to recent criticisms, Ethereum co-founders Vitalik Buterin and Joe Lubin hinted at “large changes” to the leadership structure of the Ethereum Foundation. Addressing the foundation’s previous lack of participation in the Ethereum ecosystem, Josh Stark, a contributor to the foundation, explained that the organization previously used the blockchain to sell tokens, distribute grants, and handle payments for event tickets.

This is not the first time the Ethereum Foundation has faced community backlash. Last year, controversy arose when it was revealed that high-profile researchers Justin Drake and Dankrad Feist had taken advisory roles at EigenLayer, receiving significant token incentives, which they subsequently withdrew from.

“An interesting development. If there exists a middle ground that most people could agree upon, it probably involves the Ethereum Foundation engaging more with dApps,” stated Paul Dylan-Ennis, a lecturer at University College Dublin’s business school and a notable Ethereum commentator.

(Safe is a crypto wallet company while Aave is a decentralized finance protocol.)