The Ethereum Foundation (EF) has announced a comprehensive treasury policy aimed at fostering enhanced financial stability, sustainability, and transparency. Central to this policy is the establishment of an operating expense buffer covering approximately 2.5 years, designed to ensure operational continuity regardless of market volatility.
The EF will implement an annual spending cap, initially set at 15% of total treasury assets, with a planned gradual reduction to 5% over the next five years. This spending control is intended to conserve capital and enable strategic, long-term funding of Ethereum ecosystem development.
The new policy also emphasizes a strategic approach to ETH asset management, including minimal ETH sales and the use of solo staking and yield-bearing DeFi protocols to generate on-chain returns. This approach limits market impact and aligns with the EF's goal to support decentralized, privacy-preserving infrastructure.
EF’s treasury plan prioritizes backing privacy-focused DeFi projects consistent with Ethereum’s core values like self-custody and open-source development. It features rigorous risk management processes, including careful protocol selection based on security audits and decentralization, and flexibility to reallocate funds according to market conditions.
Transparency and accountability are reinforced through regular quarterly and annual financial reporting to the EF board and management. These reports will provide insights into spending, asset allocation, and treasury management, enhancing community trust.
This structured financial framework marks a strategic evolution for the Ethereum Foundation, positioning it as a resilient steward of ecosystem resources that can withstand market downturns while fostering innovation in privacy and DeFi.