Ethereum Foundation to Convert ETH for Stablecoins to Fund Growth

The Ethereum Foundation (EF) is planning to convert part of its treasury from Ethereum (ETH) into stablecoins. On October 3, the foundation announced that it would exchange 1,000 ETH, worth around $4.5 million, to secure funds for its ongoing work. The decision highlights its ongoing effort to balance funding needs while showcasing the practical use of its decentralized finance (DeFi) tools.

Ethereum Foundation Plans to Use DeFi Tools for the Swap

In its announcement shared on X, the Ethereum Foundation explained that it plans to carry out the trade through CoWSwap’s TWAP tool. 

TWAP, short for Time-Weighted Average Price, allows large trades to be split into smaller parts over time. This helps reduce sudden price changes and avoids creating pressure on the market.

By using this tool, the foundation will not only manage its treasury more carefully but also show how DeFi platforms can be reliable for large-scale transactions. The stablecoins gained from the swap will be directed toward projects that support Ethereum’s long-term growth. 

This includes research, community grants, and global donations.

Community Questions Ethereum Foundation’s ETH Sales

This planned sell-off is smaller compared to last month’s transaction. In September, the foundation converted 10,000 ETH, worth about $43.6 million at the time, into stablecoins. 

That swap was carried out on centralized exchanges. Still, the purpose was the same, which is to fund research programs, donations, and grants for the Ethereum community. Both transactions were described as routine steps to maintain steady funding for the foundation’s work.

Not all members of the Ethereum community welcomed the news. Just as with September’s announcement, many users on X questioned whether directly selling ETH is the best approach. Some suggested alternatives, such as borrowing against ETH on DeFi lending platforms or arranging over-the-counter (OTC) deals with large digital asset treasuries. 

These options, they argued, would allow the foundation to raise funds without reducing the size of its ETH holdings. 

Ethereum Foundation Explains ETH-to-Stablecoin Strategy

In response to the backlash online, the Ethereum Foundation said its recent moves follow its treasury policy, first shared in June 2023. 

These rules explain how it manages money with a focus on safety, easy access to funds, and long-term stability. The foundation reviews its plan often and makes changes when needed, while staying true to Ethereum’s values of openness and decentralization.

According to the policy, the main goal is to balance short-term funding with long-term security. That is why sometimes the foundation changes ETH into stablecoins, a normal step to reduce risks and support growth, while staying true to Ethereum’s values of openness and decentralization.