TL;DR
- The Ethereum Foundation has deployed $120 million in Ether to DeFi apps, allocating 45,000 ETH to protocols such as Aave, Spark, and Compound.
- Aave received the largest allocation with 30,800 ETH, representing the Foundation’s biggest investment in DeFi.
- The community celebrates the move, considering it a positive step to reduce ETH sales and foster the growth of decentralized finance.
On February 13, the Ethereum Foundation announced a significant backing for decentralized finance (DeFi) apps by deploying 45,000 ETH, roughly equivalent to $120 million, across three major DeFi protocols: Aave, Spark, and Compound. This move addresses community concerns about the Foundation’s reliance on ETH sales to fund its operations.
Through its multisignature address, the Foundation deposited 4,200 ETH into Compound, 10,000 ETH into Spark, and 30,800 ETH into Aave, with ETH priced near $2,600 per unit. This decision has been celebrated by many in the crypto community, who view it as a crucial step to strengthen the DeFi ecosystem and reduce the pressure on the Foundation to sell Ether in the market.
The Largest Ethereum Foundation Backing to Aave
Aave’s CEO and founder, Stani Kulechov, highlighted that the 30,800 ETH allocated to Aave Prime and Aave Core marks the Ethereum Foundation’s largest investment in the DeFi space. Kulechov expressed optimism, stating that DeFi will win, emphasizing the importance of adding liquidity to Aave as a key driver for decentralized finance.
A Smart Move That Promotes Ethereum’s Sustainability
The community’s reaction has been overwhelmingly positive, with many members celebrating the move as a smart decision. Mark Jeffrey, a podcaster and ecosystem advocate, called the action a “smart” move that underscores Aave’s essential role in the DeFi market. On the other hand, the co-founder of HyperLend, known as 0xNessus, remarked that it’s surprising the Foundation only started engaging with DeFi apps recently, but
“all we had to do was push them a little,” referring to the Ethereum Foundation.
This step comes after criticisms of the Foundation for its previous practice of selling ETH to cover operational expenses. Eric Conner, co-author of the EIP-1559 proposal, had pointed out that the Foundation’s main use case seemed to be “dumping ETH,” which affected Ethereum’s price stability. The Foundation had justified this stance by citing regulatory uncertainty and the need to ensure operational viability.
The community sees this ETH deployment as a positive for the ecosystem, while the Ethereum Foundation promises more similar actions in the future, focusing on staking and exploring new ways to engage the community.
