What You Need to Know:

• The Ethereum Foundation is reallocating $165.3 million to a new wallet to actively engage in the DeFi (decentralized finance) space to potentially enhance its treasury.
• This initiative follows a 39% drop in its treasury over approximately three years, during which a significant portion of assets remained in ether.
• Restructuring within the Foundation aims to bolster technical expertise, improve communication, and enhance support for application builders.

The Ethereum Foundation is directing 50,000 ether (ETH), approximately $165.3 million, towards the decentralized finance ecosystem as it seeks to fortify its financial standing. The Foundation plans to implement a 3-of-5 multisig wallet via Safe, which has been praised for its security and user-friendly interface. The initial step involves a test transaction with Aave, a leading lending protocol in alignment with the Ethereum ecosystem.

In order to stabilize and grow its financial standing, the Ethereum Foundation seeks to participate actively in the DeFi landscape after experiencing a 39% contraction in its treasury, which currently totals $970.2 million as of October 31. Most of its assets are held in ether, which recently hit a 4-year low in relation to bitcoin.

According to Vitalik Buterin, co-founder of Ethereum, the Foundation has avoided staking its ETH due to various concerns surrounding regulatory compliance and the organization’s neutrality. Under the current CESR Composite Ether Staking Rate, the Foundation could potentially receive a 3.31% yield on its ether holdings.

Vitalik Buterin confirmed over the weekend that the organization is undergoing a significant overhaul in its leadership structure. This transformation aims to improve technical prowess within the upper echelons of the Foundation, enhance communication across the Ethereum ecosystem, and provide better support to application developers, among other goals.

He clarified that the Foundation is not attempting to shift its ideological stance, nor is it looking to lobby heavily with regulators or become excessively centralized.