TLDR
- The Ethereum Foundation plans to reduce annual spending from 15 to 5% by 2030.
- A rule-based system will trigger ETH sales only when liquid reserves fall below a 2.5-year spending buffer.
- The Foundation will use secure and audited DeFi protocols to manage and grow its treasury assets.
- Staking and lending of wrapped ETH will only occur through trusted and transparent DeFi platforms.
- The Foundation has introduced a new philosophy called Defipunk that supports financial privacy and open-source values.
The Ethereum Foundation has introduced a structured financial strategy to secure its future, strengthen decentralisation, and reduce operational costs. This long-term plan aims to preserve treasury assets, support trusted DeFi protocols, and uphold Ethereum’s core values. The Foundation also announced key structural changes and a transparency initiative to align technology with financial sustainability.
Ethereum Foundation Sets Strict Spending Limits
The Ethereum Foundation plans to reduce its annual spending from 15% to 5% of its total treasury assets by 2030. It aims to maintain a financial runway of 2.5 years to support stable operations across all market cycles. Therefore, the Foundation will implement spending cuts while maintaining project continuity.
To enforce this approach, the Foundation introduced a rule-based treasury withdrawal system that activates only under specific liquidity thresholds. It will review liquid reserves every quarter and adjust assets as required for balance. This mechanism prevents unnecessary ETH sales and protects reserves from volatility.
Announcing the Ethereum Foundation Treasury Policyhttps://t.co/bU566m1zX5
— Ethereum Foundation (@ethereumfndn) June 4, 2025
These fiscal changes reflect the Foundation’s strategy to manage risks without compromising development or decentralisation efforts. The aim is to ensure long-term viability while preserving essential projects. Treasury policies will be enforced with clear rules and regular assessments.
DeFi Integration Focuses on Security and Transparency
The Ethereum Foundation will expand its treasury through secure and audited decentralised finance protocols to ensure permissionless and open access. It will stake ETH independently and lend wrapped ETH (wETH) to credible DeFi platforms only. All DeFi activities will remain public and traceable to align with Ethereum’s principles.
Rather than chasing maximum profits, the Foundation prioritises responsible growth and low-risk engagement with decentralized systems. It plans to avoid protocols or practices that compromise decentralization or expose assets to excessive risk. Each partnership will reflect Ethereum’s broader mission to support freedom through open finance.
DeFi collaborations will include community feedback and maintain transparency on selected tools, strategies, and associated risks. The Ethereum Foundation seeks to enable a reliable ecosystem built on ethical practices. This approach ensures financial development remains aligned with network decentralization.
“Defipunk” Ideology and Operational Restructuring
To guide decision-making, the Ethereum Foundation has adopted a new philosophy called “Defipunk” rooted in freedom, privacy, and open-source culture. This ideology supports selective funding to teams that promote decentralisation, censorship resistance, and user sovereignty. Funding priorities will now reflect these foundational ideals.
Alongside its financial shift, the Foundation restructured internal teams and renamed its research and development division to “Protocol.” This unit now focuses on improving Ethereum Layer 1 usability, scaling solutions, and fostering Layer 2 innovation. The goal is to streamline operations while supporting infrastructure advancements.
The Foundation will also issue quarterly and annual financial reports detailing reserve levels, investment performance, and treasury activity. This transparency initiative aims to establish accountability and maintain trust with the Ethereum community. Clear reporting ensures alignment between strategic financial goals and technological development.
