Ethereum Foundation may fully shift its funding strategy from selling ETH to DeFi operations.

## Shift from selling Ethereum

Stani Kulechov, the founder of the DeFi (decentralized finance) liquidity protocol “Aave,” posted on X on the 29th that the Ethereum Foundation is borrowing Aave’s US dollar stablecoin “GHO.”

It is pointed out that not only is Aave supplying cryptocurrency (virtual currency) Ethereum (ETH), but it is also borrowing and circulating funds. The Ethereum Foundation has been criticized in the past for selling Ethereum to cover operational costs, and there is a possibility that it is seriously shifting its funding methods from selling to operations in DeFi.

What is DeFi?

An abbreviation for “Decentralized Finance”. Refers to financial services or systems that utilize blockchain technology and operate without a central administrator.

It has been pointed out for some time that the Ethereum Foundation may be managing funds in DeFi. In February of this year, the Ethereum Foundation itself announced that it had moved a total of over 18 billion yen worth of Ethereum to DeFi platforms such as Aave at that time’s exchange rate.

Since the Ethereum Foundation needs to cover its operating costs, there were voices supporting the sell of Ethereum, but there were previously many criticisms that it would lead to selling pressure.

Ethereum co-founder Vitalik Buterin explained that “the foundation pays researchers and developers for their contributions” and called for respect, but investors were growing dissatisfied.

Support for DeFi operations

The strategy of covering operational costs through DeFi operations instead of selling Ethereum carries risks, but there are many positive voices.

If the Ethereum Foundation is in full swing using DeFi as a practical operational means, not only will selling pressure decrease, but there will also be the benefit of increased reliability of DeFi.

Furthermore, it was pointed out that large organizations like the Ethereum Foundation entering DeFi could contribute to the development of the ecosystem.

Mr. Kretchov claimed in the thread of the above post that “the next step (of the Ethereum Foundation) is looping on Aave.” Looping refers to the practice of using borrowed assets as collateral to borrow even more.

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