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Ethereum Foundation Allocates 50K ETH to Boost DeFi Apps
In a significant move, the Ethereum Foundation has decided to allocate 50,000 Ether (ETH) towards boosting decentralized finance applications. This announcement comes after months of criticism from the Ethereum community regarding the foundation’s lack of proactive engagement in the development of DeFi.
According to sources, the allocated ETH will be stored in a multisig wallet hosted on Safe, and will utilize Aave’s lending protocol to generate yield without immediate liquidations. This decision is seen as a significant step forward for the foundation, which has traditionally relied on selling ETH to fund its operations.
The allocated funds amount to approximately 165 million USD, and represents an 18.5% decrease in the foundation’s total ETH holdings, down from 617,000 ETH in 2020 to 269,000 ETH as of press time.
Critics within the Ethereum community have long accused the foundation of not doing enough to support the growth and development of DeFi applications. However, this latest move aims to address these criticisms by providing a clear signal that the foundation is committed to exploring alternative funding strategies.
Ethereum’s co-founder, Vitalik Buterin, emphasized that the foundation does not plan to lobby regulators or deviate from its principle of neutrality. Some in the community have noted that this approach may be a missed opportunity for the foundation to strengthen Ethereum’s market presence. However, others, including CryptoQuant’s CEO, have praised the foundation for prioritizing long-term value creation over short-term price gains.
This significant allocation is expected to offset the need for direct ETH sales, reducing sell-side pressure on the asset and allowing the community to benefit from the generated yield without immediate liquidations.
Source: cryptotale.org
