Ethereum Foundation plans to cut annual spending to 5% of its total assets by the year 2030.
The new treasury policy uses rules to sell Ethereum only when cash reserves fall below a set level.
The Foundation will support DeFi projects that match Ethereum values and focus on privacy in finance.
The Ethereum Foundation has introduced a new treasury policy aimed at reshaping its financial management. The move seeks to align spending and investments with the broader Ethereum ecosystem’s principles.
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The updated approach reduces operating expenses and adds stricter rules for managing reserves. The Foundation plans to cut its annual spending from 15% of total assets to just 5% by 2030. This change sets a clear goal to ensure long-term financial stability.
New Spending Framework Introduced
The revised policy introduces a rule-based system for converting Ethereum reserves into cash. The Foundation will now only sell Ethereum when cash reserves fall below a set threshold. That level equals 2.5 years of operating expenses, which currently represents about 37.5% of the total treasury.
Each quarter, the Foundation will calculate how much Ethereum to convert based on operating needs. Conversions will happen through exchanges or on-chain swaps, ensuring flexibility while maintaining predictability.
Long-Term Stewardship With Narrower Scope
The Foundation expects to stay active as a long-term steward. However, it plans to gradually narrow its focus over time. The policy sets a “glide path and baseline” to guide future decisions and spending. This approach adds structure while adjusting to changing conditions in the Ethereum landscape.
By planning a reduction in annual expenses and following clear rules for fund conversions, the Foundation aims for better sustainability. The model also avoids reactive decisions by using a structured conversion method based on treasury health.
Support for DeFi and New "Defipunk" Concept
In addition to internal changes, the Foundation plans to use its treasury to support decentralized finance protocols. The updated strategy includes earning returns on reserves through DeFi projects aligned with Ethereum’s principles.
The organization introduced a new term, “Defipunk,” which adapts cypherpunk values to the decentralized finance world. It draws from Eric Hughes’ 1993 Cypherpunk Manifesto, which promoted privacy and cryptography as tools for freedom.
The Foundation believes privacy remains overlooked in DeFi. It aims to support projects that treat privacy as a shared responsibility. It sees this early institutional support as a way to shift the balance toward privacy-focused development.
Rule-Based Cash Reserve Management
Each quarter, Ethereum reserves will be reviewed and converted to fiat if needed. The amount depends on projected spending and the desired financial buffer.
The strategy seeks to provide stability, transparency, and stronger alignment with Ethereum’s mission. It reflects a broader shift toward structured, principle-driven financial stewardship in crypto governance.
