Ethereum Foundation adopts long-term treasury policy focused on DeFi
In a major step to reinforce its long-term commitment to Ethereum’s decentralization and resilience, the Ethereum Foundation has introduced a new treasury policy that reimagines how its substantial reserves are managed.
The updated framework outlines a balanced approach between financial sustainability and Ethereum-aligned values, with a particular focus on strengthening the decentralized finance (DeFi) ecosystem.
Asset management model and long-term expense strategy
At the heart of the new policy is a formalized asset-liability management model based on annual operating expenses (Opex) and a multi-year financial buffer. The Ethereum Foundation has set its current Opex target at 15% of the total treasury, with a 2.5-year reserve buffer. This formula will determine the cadence and scale of ETH sales to maintain stable fiat-denominated reserves while preserving the majority of ETH holdings for long-term use.
Importantly, the Foundation plans to gradually reduce its operating expenses to 5% over the next five years, following an endowment-style model commonly used by academic and philanthropic institutions. This reflects EF’s intent to scale down operational scope while remaining a dedicated steward of Ethereum’s core principles.
Decentralized investments and emphasis on security
On the crypto investment side, the Ethereum Foundation is prioritizing DeFi-native deployments while establishing clear standards for risk, security, and effectiveness. The foundation favors immutable, audited, permissionless protocols and is cautious not to add systemic risk to the Ethereum ecosystem. It also plans to engage in on-chain yield strategies, including solo ETH staking and selected lending protocols, following a conservative approach with regular risk reviews.
Defipunk principles and the future of Ethereum
The Foundation places special emphasis on aligning its financial strategy with “Defipunk” principles — a vision of confidential, trust-minimized, and fully decentralized finance. Internal guidelines have been introduced for DeFi engagement, requiring open-source code, self-custody by default, minimal reliance on centralized oracles, and strong user privacy protections.
Through this new policy, Ethereum Foundation aims not only to safeguard and grow its reserves, but also to steer the Ethereum ecosystem toward a more secure, decentralized, and privacy-focused future.
With 2025–2026 identified as pivotal years for Ethereum’s development, the Foundation hopes this strategic shift will serve as a model for other institutions looking to meaningfully contribute to a resilient and sovereign Web3.
Earlier, the Ethereum Foundation also underwent a major leadership restructuring aimed at accelerating network scaling initiatives and reinforcing its core values.
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