Ethereum Foundation deploys $120M into DeFi protocols

The Ethereum Foundation has allocated $120 million in Ether (CRYPTO:ETH) to decentralised finance (DeFi) protocols, including Aave (CRYPTO:AAVE), Spark (CRYPTO:SPK), and Compound (CRYPTO:COMP).

The foundation's multisignature address deposited 4,200 ETH into Compound, 10,000 ETH into Spark, and 30,800 ETH into Aave on February 13.

With Ether priced at approximately $2,600, the total value of the 45,000 ETH deployed amounts to roughly $120.4 million.

Aave founder and CEO Stani Kulechov noted that the 30,800 ETH allocated to Aave Prime and Aave Core represents the Ethereum Foundation’s “biggest allocation in DeFi.”

Kulechov also expressed optimism, stating, “DeFi will win,” as the foundation increased liquidity on Aave.

This move addresses community concerns regarding the Ethereum Foundation’s previous reliance on ETH sell-offs to fund its operations.

Many community members have welcomed the deployment, suggesting it could reduce the need for the foundation to sell ETH to cover expenses.

Podcaster Mark Jeffrey described the move as “smart,” emphasising lending as crucial to DeFi and Aave as central to lending.

0xNessus, co-founder of HyperLend, found it surprising that the foundation had only recently begun engaging with DeFi apps.

The Ethereum Foundation faced criticism in January for selling ETH to cover operating expenses and staff payments.

Eric Conner, co-author of Ethereum Improvement Proposal (EIP-1559), stated that the foundation’s primary use case was "dumping ETH."

Anthony Sassano, host of The Daily Gwei, suggested staking ETH and borrowing stablecoins instead of selling crypto assets, which many consider detrimental to its price.

The Ethereum Foundation has indicated that further fund deployments are planned and is considering staking and seeking community input.

At the time of reporting, the Ethereum (ETH) price was $2,677.37.