Ethereum Foundation’s $2M DeFi Adventure: Is This the Future or Just a Fad?

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So, the Ethereum Foundation (EF) has decided to borrow a cool $2 million in GHO, which is basically a fancy decentralized stablecoin from Aave. Because, you know, who needs traditional finance when you can dive headfirst into the wild world of DeFi? 💸

In a post on May 29, Aave’s founder, Stani Kulechov, casually dropped the news that the EF is not just lending ETH to Aave but also borrowing from them. It’s like a financial game of tag, and guess what? Everyone’s it! “The full DeFi circle,” he called it. Sounds like a fun party, right? 🎉

Now, GHO is not your average stablecoin. It’s overcollateralized and governed by Aave’s decentralized autonomous organization (DAO). So, while centralized stablecoins are like that one friend who always shows up late, GHO is the reliable one who actually brings snacks. 🍕

This move shows that the EF is getting serious about its DeFi game, stepping up its treasury strategies like a boss. But, of course, they didn’t bother to comment when asked. Classic! 🙄

Ethereum Foundation previously deployed $120 million in DeFi

Oh, and let’s not forget that the EF has already thrown $120 million into various DeFi protocols. It’s like they’re on a shopping spree, but instead of shoes, they’re buying liquidity. 👠💰

Back in February, they deployed 45,000 Ether (ETH) across different DeFi protocols, including Aave, Spark, and Compound. At that time, the Ether was worth $120 million. Talk about a hefty investment! 💪

Kulechov called this deployment the foundation’s “biggest allocation in DeFi.” He’s feeling optimistic, saying that DeFi will win. Well, let’s hope he’s right, or else it’s going to be a very awkward dinner party. 🍽️

Community members are also cheering for the EF’s new approach to managing its ETH. One user said it was a win and encouraged them to “keep it up.” Because nothing says “we love you” like a little financial encouragement, right? 😍

Criticisms of the foundation selling Ether

But not everyone is on board with the EF’s strategy. Back in January, some Ethereum community members were like, “Hey, maybe don’t sell ETH for operational funding?” They suggested using DeFi tools like staking instead. Because who needs to sell when you can just borrow against your assets? 🤷‍♀️

Eric Conner, co-author of EIP-1559, was particularly vocal, calling the selling “insane.” He urged the EF to stake or use DeFi instead of dumping their holdings. I mean, who wouldn’t want to keep their precious ETH? 😱

Anthony Sassano, host of The Daily Gwei, chimed in with a brilliant idea: stake some ETH and sell the staking rewards. Genius! Or maybe just borrow stablecoins against their holdings. Because why not? 🤔

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2025-05-29 15:50