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Another $32M ETH Gone: Is the Ethereum Foundation Dumping Too Much?
The Ethereum Foundation has transferred another massive amount of Ether (ETH) to a treasury wallet in just three weeks, raising concerns among community members that the foundation may be dumping too much. On-chain data confirms that the foundation moved 1,000 ETH daily from June 10th to July 1st, totaling 13,000 ETH – one of its fastest sell cycles in recent years.
For context, the Ethereum Foundation has traditionally funded operations by selling ETH. In previous years, it sold approximately 15,000-20,000 ETH annually. However, moving 13,000 ETH in under a month now shows a faster drawdown than its historical pace.
Despite these concerns, blockchain trackers show that the ETH was sent to a Gnosis Safe multisig wallet, a standard security measure. Treasury reports confirm that these funds usually reach fiat through regulated OTC desks, not open market dumps. It’s worth noting that the foundation still holds an estimated 94,000-97,000 ETH and around $120-$130 million in fiat and stablecoins, which brings its total treasury near $250-$300 million at current prices.
Some community members have suggested that the foundation could stake its ETH instead of selling it outright. Current yields average 3%-4%, which could generate $7-$10 million per year in passive income if the entire treasury were staked.
However, Ethereum co-founder Vitalik Buterin defended the sales, stating that large-scale staking could complicate governance if forks occur and cited legal uncertainty around whether staked ETH could be viewed as a security. He also mentioned that these concerns have eased somewhat since then.
The foundation’s ETH sales fund developer grants, research, legal needs, and ecosystem events. In 2024, it contributed to EIP-4844 proto-danksharding work and supported the Tornado Cash legal defense, a key privacy battle within crypto circles.
In an effort to reduce spending dependence on its reserves, the foundation adopted its first formal Treasury Policy in June, capping the annual operating budget at 15% of assets and targeting a 2.5-year funding buffer. The plan aims to reduce spending dependence on reserves over five years.
It remains unclear what exactly drives these large-scale ETH transfers, but one thing is certain – the Ethereum Foundation’s actions have significant implications for the market. With Ethereum price hovering near $2,445, sitting around its 20-day and 200-day exponential moving averages at about $2,461 and $2,469, respectively, it will be crucial to monitor these developments closely.
The article concludes that while there may be concerns raised by community members regarding the foundation’s actions, it is essential to keep in mind the broader context of Ethereum’s growth and future.
Source: coinchapter.com
