The Ethereum Foundation has unveiled a comprehensive update to its treasury management strategy, underscoring its assertion that the upcoming two years will be critical for the blockchain’s future.
Published on Wednesday, the new policy delineates the foundation’s approach to balancing sustainability with support for the ecosystem as Ethereum enters what is described as a “pivotal” phase.
Under the revised framework, the foundation intends to modify its Ether sales and capital investments based on a predetermined operating expense buffer. This strategy entails selling or investing Ether in accordance with its projected spending needs for the next several years, thereby ensuring financial stability.
Treasury allocations will be adjusted to align with market conditions and evolving priorities, placing increased emphasis on decentralized finance and infrastructure focused on privacy.
Announcing the Ethereum Foundation Treasury Policy https://t.co/bU566m1zX5
— Ethereum Foundation (@ethereumfndn) June 4, 2025
This announcement follows a series of internal changes within the organization. Earlier this week, the foundation let go of several members from its research and development team and reorganized its Protocol Research and Development department, which has now been streamlined under the name “Protocol,” to enhance a focus on scalability and usability.
Ethereum Foundation Establishes Treasury Buffer to Navigate Market Cycles and Support Critical Upgrades
The foundation has designated its target operating budget at 15% of total reserves, while also planning to maintain a 2.5-year runway. This new financial formula will dictate the balance between the Ether it holds and the amount converted to fiat currency.
This pivotal adjustment comes as Ethereum braces for significant protocol upgrades, potentially encompassing broader Layer 2 adoption alongside improvements in scalability and privacy.
This proactive approach seeks to amplify support during market downturns while allowing for the flexibility to withdraw during bullish cycles, thereby acting as a stabilizing counterforce.
Although ETH remains the foundation’s primary asset, this policy shift indicates a transition towards a more dynamic strategy in treasury management.
Stability in Fiat Reserves Derived From Bonds and Tokenized Assets Rather Than Solely ETH Sales
The organization will persist in staking ETH and utilizing wrapped ETH within decentralized finance protocols, ensuring alignment with its stringent security standards through the use of audited and proven systems.
Additionally, there is a plan to broaden exposure to tokenized real-world assets and investment-grade bonds, aimed at enhancing stability within its fiat reserves.
Privacy and decentralization will remain key priorities. The foundation reaffirmed its dedication to its “Defipunk” principles, focusing on supporting projects that protect user privacy while employing transparent, open-source code and minimizing centralized control.
It will also assess new protocols and user interfaces against a publicly established framework emphasizing permissionless access, immutability, and reduced dependency on centralized oracles.
Quarterly Reports and Performance Metrics Indicate a New Era of Treasury Discipline
This move represents a significant shift away from previous passive treasury management practices. Historically, the foundation primarily held ETH; however, the increasing complexity and volatility of the ecosystem have necessitated a more proactive approach.
Moving forward, Ether sales and protocol allocations will adhere to internal benchmarks that will be reviewed quarterly.
Transparency remains a foundational principle, with the foundation pledging to release annual reports detailing asset distribution across fiat, idle ETH, and deployed ETH.
Internally, board members and senior management will receive quarterly updates encompassing performance evaluations, risk assessments, and highlights of ecosystem engagement.
In the foundation’s perspective, a more structured treasury policy is essential for Ethereum’s long-term autonomy and fulfillment of its mission.
With rising institutional interest and increased regulatory scrutiny, the stakes are high. The next two years may determine whether Ethereum can establish itself as a leader in decentralization or face constraints imposed by the very institutions it seeks to disrupt.
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