It also sets detailed guidelines for ETH sales, stablecoin holdings, and on-chain deployments, marking a notable departure from the foundation’s historically passive capital stance.
Following the transition to proof-of-stake and the January 2024 approval of US-listed Ethereum ETFs, capital inflows and application-layer innovation have accelerated.
To manage risk, the foundation has adopted a dual-variable treasury formula that calculates fiat reserve needs by multiplying a fixed annual operating expense target, currently set at 15%, by a 2.5-year runway.
While Ethereum remains the cornerstone of the treasury, EF’s new guidelines permit broader exposure to on-chain opportunities, including staking, lending, tokenized real-world assets, and carefully vetted DeFi protocols.
Among the most defining elements of the policy is a codified commitment to privacy, which the Foundation frames as “an essential civil liberty” in an increasingly surveilled financial landscape.
The guidelines reflect growing concern across the Ethereum community about the rise of KYC-gated apps, centralized user interfaces, and excessive reliance on off-chain legal protections.
Through a new internal rubric called “Defipunk,” EF will evaluate potential DeFi partners across a range of criteria: permissionless access, self-custody, open-source licensing, and technical privacy features like transaction shielding.
Protocols that fall short may still qualify, but only if they demonstrate credible progress toward those ideals. This marks a rare institutional effort to inject normative standards into decentralized finance—an industry often driven more by incentives than ethics.
However, it may also put EF at odds with regulatory trends in the US and Europe, where policymakers have increasingly prioritized transparency and compliance over cryptographic privacy.
EF’s internal operations will also be subject to these standards. Staff working on treasury deployment are expected to use privacy-preserving tools and contribute to open-source infrastructure, a move aimed at setting a higher bar for ideological alignment.
