The Ethereum Foundation (EF) has officially unveiled its updated Treasury Management Policy, marking a pivotal shift in how the organization manages its finances, allocates resources, and envisions the future of decentralized finance. Released on June 4, the policy outlines a structured approach to spending, asset diversification, and long-term strategic goals—most notably under the banner of “Defipunk,” a new framework emphasizing privacy, self-custody, and open-source innovation.
This overhaul isn't just about budgeting—it reflects a deeper recalibration of EF’s role within the Ethereum ecosystem as it navigates increasing scrutiny, market volatility, and evolving community expectations.
Strategic Shift: From Crisis Response to Long-Term Resilience
At its core, EF’s treasury exists to ensure the foundation’s autonomy, sustainability, and legitimacy. While it will continue to act as a steward of the Ethereum ecosystem, its scope is gradually narrowing—focusing more sharply on protocol-level development rather than broad ecosystem funding.
A key driver behind this shift is the recognition that 2025–2026 represents a critical window for Ethereum’s technical evolution. To meet ambitious milestones in L1 scalability, blob transactions, and user experience (UX) optimization, EF plans to maintain an annual operating expenditure of 15% of its treasury—a relatively high rate designed to accelerate progress during this decisive period.
To support this spending without relying on volatile ETH prices, EF has introduced a buffer-based financial model:
Target Fiat Reserve = Annual Operating Spend (%) × Operational Buffer (Years)
With a 2.5-year operational buffer and 15% annual spend, EF aims to hold 37.5% of its treasury in fiat. Given that over 81.3% of its current assets are in crypto, this implies a significant reduction in ETH holdings—potentially up to 30%—to meet liquidity needs.
👉 Discover how leading protocols manage treasury risk in volatile markets.
A Two-Layer Financial Model: Structure Meets Execution
EF’s new policy introduces a dual-layer framework that separates strategic planning from tactical execution.
Layer 1: Structural Asset Allocation
The structural model focuses on long-term stability. By anchoring decisions to fixed ratios (like the 15% spend and 2.5-year buffer), EF minimizes reactive moves driven by short-term price swings. This enhances governance predictability and reduces emotional decision-making.
Based on the 2024 EF report, the treasury was valued at $970.2 million**, down 39% from previous disclosures. With 2023 operating expenses totaling **$134.9 million (13.9% of treasury), the jump to 15% signals increased investment in core infrastructure.
Layer 2: Quantitative Execution
Once the structure is set, EF applies it to real-world figures:
- Target fiat reserve: 15% × 2.5 × $970M ≈ **$363 million**
- Remaining crypto portion: 62.5% of treasury
- At $2,500 per ETH, this translates to approximately 242,000 ETH held long-term
This formula allows EF to dynamically adjust holdings based on market conditions. During bull markets, more ETH can be sold to lock in gains; in downturns, holdings remain stable thanks to sufficient fiat reserves.
Crucially, the board will periodically reassess both parameters (A and B), ensuring alignment with technological timelines and macroeconomic realities.
RWA Integration: Bridging On-Chain Finance with Real-World Stability
One of the most significant updates is EF’s formal inclusion of tokenized real-world assets (RWAs) into its treasury strategy. These assets are now categorized into three tiers:
- Immediate liquidity assets – For daily operations
- Low-risk mid-to-long-term instruments – Matching future obligations
- On-chain RWAs – Integrated into a unified yield strategy
EF will prioritize RWAs that are on-chain transparent, auditable, and governed decentrally—ruling out traditional financial products reliant on legal trust layers. This ensures alignment with Ethereum’s core values while unlocking stable returns.
Potential deployments include:
- Stablecoin lending
- High-security tokenized bonds
- Yield-bearing RWA protocols
While specific partners haven’t been disclosed, this move signals EF’s growing confidence in DeFi-native solutions for institutional-grade finance.
👉 Explore how tokenized assets are reshaping institutional investing.
Introducing “Defipunk”: A New Standard for Ecosystem Funding
Beyond finance, EF is redefining what kind of projects deserve support through a new evaluation framework called Defipunk—a nod to cypherpunk ideals and a commitment to building a more private, resilient DeFi future.
This framework emphasizes six core principles:
- Security
- Open-source (FLOSS standard)
- Financial self-sovereignty
- Trust-minimized systems
- Encryption-enforced freedom
- Privacy by design
Projects seeking EF funding will now be assessed against strict criteria:
- Permissionless access
- Self-custody compatibility
- Transparent development and governance
- Decentralized UIs
- Audited codebases
- Anti-manipulation oracle designs
Notably, EF has declared privacy as DeFi’s “unfinished mission.” It plans to fund research and development in confidential transactions, data protection tools, and anonymous identity solutions, potentially boosting protocols like Railgun and other privacy-focused innovators.
This marks a shift from informal influence to transparent, values-driven governance—where legitimacy comes not from personal connections but from adherence to shared principles.
Community Reaction: Is This Reform or Retreat?
The announcement coincided with internal restructuring: EF laid off select researchers and consolidated teams into a new “Protocol” division focused on high-impact deliverables. Critics had long accused EF of bloated spending and slow output; this move suggests a response to those concerns.
Meanwhile, external validation emerged from unexpected quarters. SharpLink Gaming, a U.S.-listed company backed by ConsenSys, announced plans to raise $425 million to accumulate ETH—a move dubbed the “ETH version of MicroStrategy.” The news triggered a **4% price surge within 24 hours**, pushing ETH toward $2,640.
Additionally:
- ETH/BTC ratio rose over 2% on June 4
- Monthly gains exceeded 50%
- Market sentiment shifted from skepticism to cautious optimism
These developments suggest a broader narrative shift: Ethereum’s value proposition is increasingly being validated not by foundation-led initiatives alone, but by market-driven conviction and institutional adoption.
Frequently Asked Questions
What is the purpose of EF’s new Treasury Management Policy?
The policy aims to strengthen financial resilience, enable sustained investment in core protocol development, and align treasury practices with Ethereum’s long-term vision—especially around privacy and decentralization.
Why does EF need to sell ETH?
To maintain a 2.5-year operational buffer in fiat (37.5% of treasury), EF must convert part of its predominantly crypto-denominated holdings into stable currency—especially given its plan to spend 15% annually over the next two years.
What are tokenized RWAs, and why is EF using them?
Tokenized real-world assets represent off-chain value (like bonds or real estate) on blockchain networks. EF uses them to generate reliable yields while maintaining transparency and decentralization—balancing innovation with fiscal prudence.
What does “Defipunk” mean for developers?
It introduces a clear, public standard for project evaluation. Developers now know exactly what criteria their projects must meet to receive EF support—shifting power from insider networks to objective metrics.
Will EF continue funding non-core projects?
Likely at reduced levels. Post-restructuring, focus has shifted toward L1 improvements and essential infrastructure. Broader ecosystem grants may become more competitive and aligned with Defipunk values.
Is Ethereum becoming more centralized due to these changes?
No—the opposite. By formalizing funding standards and reducing discretionary spending, EF is promoting transparency and reducing reliance on individual influence, reinforcing decentralized governance.
The Road Ahead: Efficiency Meets Ideology
EF’s latest moves represent more than cost-cutting—they signal a maturation of Ethereum’s institutional framework. By combining data-driven treasury management, strategic RWA integration, and a principled vision via Defipunk, the foundation is positioning itself not just as a funder, but as a standard-bearer for ethical DeFi innovation.
👉 Learn how next-gen DeFi platforms are integrating privacy and scalability today.
As Ethereum prepares for its next evolutionary leap, one thing is clear: the era of opaque decision-making is fading. In its place stands a system where code, clarity, and conviction define success.