The Ethereum Foundation (EF) appears to be leaning further into decentralized finance, as Aave Founder, Stani Kulechov, revealed on X that the organization has borrowed $2 million worth of GHO, the stablecoin native to Aave’s lending protocol.
“The EF is not only supplying ETH to Aave, but also borrowing from Aave,” Kulechov wrote. “The full DeFi circle.”
The Ethereum Foundation is now borrowing GHO, a decentralized stablecoin backed by Aave.
The EF is not only supplying ETH to Aave, but also borrowing from Aave. The full DeFi circle. pic.twitter.com/prJyHi5jsM
— Stani.eth (@StaniKulechov) May 29, 2025
According to EtherScan, the EF took out a 2 million GHO loan backed by its ETH holdings, which had already been deposited on Aave. Those holdings are currently valued at about $55 million.
The GHO tokens remain in the EF’s wallet at the time of writing, but Avara’s Chief of Communications, Claudia Ceniceros, said that the funds will be used to cover operating expenses.
GHO is an over-collateralized, decentralized stablecoin governed by the Aave DAO. It is yield-bearing and subject to interest rates and collateral requirements determined by the community-run DAO.
A DeFi Strategy
Back in February 13 2025, the EF announced it had allocated 45,000 ETH – then worth $120 million – into three DeFi platforms:
Aave
Spark, and
Compound.
The largest share went to Aave, with 10,000 ETH deployed to Aave Prime and 20,800 ETH to Aave Core.
EF Treasury has deployed:
– 10,000 ETH into Spark – 10,000 ETH into Aave Prime – 20,800 ETH into Aave Core – 4,200 ETH into Compound
We’re grateful for the entire Ethereum security community that has worked diligently to make Ethereum DeFi secure and usable!
— Ethereum Foundation (@ethereumfndn) February 13, 2025
At that time, the Foundation said it was exploring staking and other DeFi strategies.
The EF has not commented publicly on this latest move.
Reducing ETH Sales
The Ethereum Foundation has drawn criticism in the past for funding operations by selling ETH, with some arguing it could better support itself by earning yield on its existing assets.
In January 2025, Ethereum developer, Eric Conner, said the EF “could easily stake ETH and use DeFi to cover most if not all of their internal budget” rather than liquidating its holdings.
Ethereum Co-Founder, Vitalik Buterin, responded that there were two main concerns: one regulatory – which he noted is easing under the new, more crypto-friendly U.S. administration – and the other political. Specifically, Buterin warned that staking EF’s ETH could tie it to positions in potential future contentious hard forks, though he added the team is exploring ways to reduce that risk.
With its latest DeFi move, the EF seems to be taking a first step toward reducing its reliance on ETH sales to fund operations.
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