Ethereum Foundation transfers $120 million into DeFi protocols

Thanks to the initiative, the organization can earn about $1,5 million a year in passive income

14.02.2025 - 11:00

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What’s new? The Ethereum Foundation invested 45 000 ETH (~$120 million) in Aave and Spark on Thursday, making it its largest direct liquidity investment to date. The distribution was aimed at generating passive income while reducing reliance on ETH selloffs for operational funding.

The decision came amid growing concerns about Ethereum’s inflationary pressures, as wider adoption of Layer-2 (L2) reduces transaction fees and circumvents ETH burning mechanisms. With ETH issuance now outpacing burn, the fund’s strategy aims to mitigate market concerns while capitalizing on revenue opportunities.

Ethereum Foundation has created a wallet for investing in DeFi protocols

Earlier, the organization was criticized for inefficient use of ETH savings

What else is known? Ethereum Foundation transferred 30 800 ETH ($81,6 million) to Aave, the largest DeFi lending protocol. Of that:

20 800 ETH ($55 million) was placed on Aave’s core market;
10 000 ETH ($26 million) was allocated to Aave Prime;
10 000 ETH ($26 million) was provided to Spark, a lending platform affiliated with MakerDAO;
4200 ETH ($11,2 million) was allocated to the Compound lending pool.

By spreading these assets across DeFi lending platforms, the Ethereum Foundation can earn about $1,5 million a year in passive income, assuming an average bid rate of 1,5%.

Many in the Ethereum community supported the decision, seeing it as a way to strengthen the foundation’s financial position without putting additional pressure on ETH sales.

The Ethereum Foundation previously reported a treasury of $970,2 million in November 2024, with 99% of its cryptocurrency assets held in ETH. It has historically followed a conservative treasury management strategy, periodically converting ETH to fiat during bull cycles to ensure operational stability.

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