Ethereum Foundation Sets Treasury Strategy to Back DeFi, Cut Spending Over Time

The Ethereum Foundation has published a new cash register policy that aims to transform how to maintain and invest its reserves, wanting to rewrite a booklet in a way that is better adapted to the world on a chain that helped in creating.

The new set of Treasury policies indicates two key moves from a non -profit organization that manages the development for the Ethereum ecosustav.

It aims to reduce annual consumption with 15% assets to only 5% by 2030, and will also seek to use its treasury for definite protocols.

These prospects are expected to “earn acceptable yields on the cash register” while remaining “in accordance with the fundamental principles of Ethereum”, Hsiao-Wei Wang, Executive Director in the Foundation, wrote Wednesday.

New policies formalize a lower consumption trajectory and an approach based on the rules for converting the Ethereum reserve of the Gotovina Foundation.

He plans to achieve this binding on the reduced annual operational costs and creating a predictable “travel path and initial value” according to consumption, Wang explained.

The Foundation “Expects to remain a long -term manager, but it envisages its scope of gradual narrowing,” Wang claimed.

In the meantime, the conversion based on the rules operates automatically selling Ethereum (ETH) Only when cash reserves fall below a 2.5-year-old costume clipboard (approximately 37.5% of the treasury), Wang wrote.

For each quarter, the Ethereum Foundation will sell some of its Ethereum reserves based on the required amount of money, converting the Ethereum to Fiat through exchange or replacements on a chain.

Targeted cash reserve, calculated as an annual operational consumption, multiplied by the desired runway, “directly informs the size and cadence of the ETH sales,” Wang noted.

Decipher He approached the Ethereum Foundation to find out more.

Ethereum goes ‘defipunk’

In the note, the Foundation introduced a “defipunk”, a new term describing how to apply “Cipherpunk” Defining (decentralized finances) and wider Ethereum ecosystem.

The term is derived from and borrows fundamental ideas in Manifesto cypherpunkWritten by American developer and mathematician Eric Hughes 1993.

In Manifesto, Hughes claims that privacy is key to free and open society. In order to retain it, individuals must build practical defense with cryptography and code, instead of relying on the authority of the government or corporation.

The Foundation established criterion For projects that seeks to support, alignment with a vision.

“For privacy to be widespread, it must be part of a social contract,” Hughes wrote.

The Ethereum Foundation echoes this, with Wang noting that privacy has “inherent network effects” and yet attracted “very little attention so far.”

“Strong, early institutional support” institutions like the Ethereum Foundation could be “uniquely valuable in turning the balance” for privacy in the decentralized financial sector, Wang wrote.

Edited Sebastian Sinclair