The Ethereum Foundation (EF), a charitable organization supporting the Ethereum blockchain, has established a multisig wallet to engage with the decentralized finance (DeFi) sector.
In this context, the organization has initiated the transfer of 50,000 ETH, valued at approximately $165.3 million, into the wallet.
The Newly Established Multisig Wallet
As per a post on X from January 20 by Hsiao-Wei Wang, who has recently taken on a leadership position at the organization, the wallet operates using a 3-of-5 multisig setup and is managed through Safe, formerly known as Safe Gnosis.
The announcement referred to Safe as demonstrating its security while also offering “a remarkable user experience.” An initial test transaction has been executed to Aave, one of the largest lending platforms in the Ethereum ecosystem.
This progress arrives as the foundation confronts persistent concerns regarding its transparency, especially in terms of treasury management.
Frequent liquidations of ETH by the EF, seemingly to fund expenses and operational costs, have also attracted criticism for amplifying pressure on the asset. This has led to recommendations that the non-profit should investigate alternatives, such as staking or utilizing a part of its ETH reserves on-chain to generate returns and satisfy its financial obligations.
Engaging in the DeFi ecosystem could provide a way to enhance the organization’s treasury, which has diminished by 39% over the past three years, totaling $970.2 million as of October 31, 2024.
A financial statement issued last year disclosed that $788.7 million, or 81.3% of its overall treasury, is held in cryptocurrency, with 99.45% of that being ETH.
In spite of these substantial holdings, Ethereum co-founder Vitalik Buterin revealed that the organization has opted against staking its ETH to reap staking rewards due to apprehensions about regulatory repercussions, preserving neutrality, and the potential difficulties presented by taking sides in the case of a network hard fork.
Leadership Changes
Recently, several notable crypto commentators have brought up new concerns, citing Ethereum’s market lag and intensifying competition from Solana as reasons for reviewing the foundation’s leadership.
Buterin has acknowledged these issues, affirming that significant changes are in progress to transform the group’s leadership framework.
He clarified that the proposed reforms are aimed at boosting the technical knowledge of the foundation’s senior leadership, enhancing communication and collaboration with major players in the Ethereum ecosystem, and providing more proactive assistance to application developers.
He also emphasized that the EF does not plan to undertake an ideological shift, aggressively lobby regulators, or gravitate toward a highly centralized governance structure.
Furthermore, Ethereum co-founder Joseph Lubin suggested a dual-leadership model for its future trajectory. He recommended Ethereum developer Danny Ryan and Jérôme de Tychey, President of Ethereum France, as candidates to balance technical skills with business strategy.
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