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Frankly, being an Ethereum Foundation is really hard.
Your job is to fund research and development of public goods and ship complex network upgrades. But it also means you're always choosing between selling your ETH or getting yelled at for selling your ETH.
EF has approximately 200 employees and an annual operating budget of approximately $145 million. That money primarily comes from ETH vaults. That ETH needs to be sold to pay staff, but ETH holders hate selling what they own. This is cryptocurrency's most unique recurring theme. “Raise the numbers, but at the same time pay for things with those numbers.”
As such, CryptoTwitter Peanut Gallery wants EF to know that it can simply “use DeFi.” Stop destroying ETH charts by putting your ETH in a lending vault and collecting yield.
EF has been reluctant to do this so far for obvious reasons. It is not the job of neutral ecosystem managers to make complex risk management decisions.
However, yesterday, the Ethereum Foundation doubled its DeFi usage (continuing from February). EF deposited 2,400 ETH ($9.1 million) and $6 million in stablecoins into Morpho's vault.
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This should be good news for bag owners, but not everyone is happy.
Previously, the Ethereum Foundation did not support its own ecosystem, but now right players, i.e. small players and underdogs.
I don't know, dude. It seems you can't please everyone. So perhaps these decisions should not be made public.
You can also imagine a world where EF tries to be “fair.” Allocate capital to smaller projects, which exposes the infrastructure to a wider range of smart contract/security risks.
Best-case scenario: Nothing breaks, but the Foundation's operating costs swell to pay security researchers and investment teams. Fairness comes at a cost. Worst case scenario: the protocol is abused and the EF's national runway is shortened.
Solana doesn't seem to have the same problem. That’s because the foundation doesn’t value the same level of fundamental transparency as Ethereum. Solana probably sells SOL too, but no one is mad because it's not on their Twitter timelines.
First, the Foundation actively supports Solmate DAT and has an active partnership with “Solana Company” DAT (formerly Helius Medical). EF sells ETH to DAT through over-the-counter sales, but does not participate in any formal investment or partnership with DAT.
