Ethereum Basis Designates $120 Million in ETH to DeFi Platforms

The Ethereum Foundation injected 45,000 ETH (approximately $120 million) into Aave and Spark on Thursday, February 13, marking its largest direct liquidity transfer to date.

This allocation aims to generate passive income while reducing dependence on ETH sell-offs for operational expenses.

This decision arises amid growing concerns regarding Ethereum’s inflationary pressures, as increased Layer-2 (L2) adoption diminishes transaction fees and circumvents ETH’s burn mechanisms.

With ETH issuance currently surpassing burns, the foundation’s strategy aims to alleviate market worries while taking advantage of yield opportunities.

Ethereum Foundation’s Major Allocation Targets Aave and Spark Amid Ether Inflation and Market Concerns

On February 13, the Ethereum Foundation transferred 30,800 ETH ($81.6 million) to Aave, the leading DeFi lending protocol.

EF Treasury has allocated:
– 10,000 ETH to Spark
– 10,000 ETH to Aave Prime
– 20,800 ETH to Aave Core
– 4,200 ETH to Compound
We appreciate the entire Ethereum security community that has worked tirelessly to ensure Ethereum DeFi is secure and functional!

— Ethereum Foundation (@ethereumfndn) February 13, 2025

Of this total, 20,800 ETH ($55 million) was deposited into Aave’s core market, while 10,000 ETH ($26 million) was designated for Aave Prime.

An additional 10,000 ETH ($26 million) was allocated to Spark, a lending platform associated with MakerDAO, and 4,200 ETH ($11.2 million) was directed to Compound’s lending pool.

By distributing these assets across DeFi lending platforms, the Ethereum Foundation is projected to earn approximately $1.5 million annually in passive yield, assuming an average supply rate of 1.5%.

Community Reactions to the Ethereum Foundation’s DeFi Allocation and Treasury Strategy

Aave founder and CEO Stani Kulechov characterized the Ethereum Foundation’s action as its “largest allocation in DeFi,” reinforcing confidence in the long-term viability of decentralized finance.

30,800 ETH deployed by Ethereum Foundation into Aave.
Largest allocation in DeFi by EF.
DeFi will prevail. https://t.co/DoJ3N5lKRF

— Stani.eth (@StaniKulechov) February 13, 2025

Many members of the Ethereum community have embraced the decision, viewing it as a means to bolster the foundation’s financial position without exerting additional selling pressure on ETH.

The Ethereum Foundation previously reported a treasury valued at $970.2 million in November 2024, with 99% of its crypto assets held in ETH.

It has consistently adhered to a conservative treasury management approach, periodically converting ETH to fiat during bullish phases to ensure operational stability.

In 2023, the foundation allocated $32.1 million—30% of its total expenditures—toward the development and research of Ethereum’s Layer-1 technology.

Institutional funding closely followed, with $28.6 million (27.1%) directed to organizations supporting the ecosystem.

More to come, including exploring staking. If you have suggestions or ideas for future allocations, please respond in the comments below and let us know!

— Ethereum Foundation (@ethereumfndn) February 13, 2025

Despite this recent liquidity infusion, the Ethereum Foundation has indicated plans for further fund allocations, with potential intentions to explore staking opportunities and additional yield-generating strategies based on community feedback.

Ethereum’s measured shift from ETH sell-offs to yield capture in established DeFi protocols provides a new perspective on managing treasury assets amid inflationary challenges.

As ETH’s dynamics evolve, this move encourages investors to reconsider how a balanced approach to income and asset preservation could redefine portfolio resilience.

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