Ethereum Foundation Unveils Treasury Policy Emphasizing Transparency and 5% Spending Cap
The Ethereum Foundation has released a treasury policy emphasizing transparency regarding its ETH holdings following scrutiny over recent sales. Co-founder Vitalik Buterin stated these sales are essential for operational costs.
Key Points of the Treasury Policy
- The policy aims for financial stability and mandates a 2.5-year buffer for operating expenses.
- Annual spending is capped at 15% of total treasury assets, with a long-term target of 5% over five years.
- A structured internal reporting system will enhance transparency, with quarterly and annual financial reports reviewed by management.
- The Foundation currently has a cash runway of 2.5 years, indicating a critical 18-month period for resource allocation.
- As of October 31, the treasury balance stands at approximately $970.2 million, with 81% in cryptocurrency assets.
Focus on Decentralized Finance (DeFi)
The Foundation aims to achieve "acceptable returns" on treasury assets through permissionless protocols, adhering to “Defipunk principles” that include:
- Battle-tested protocols for reliability and security.
- Privacy as a fundamental requirement.
- Open source and permissionless access to foster innovation.
- Self-custody standard for user asset control.
In February, the Foundation allocated 45,000 ETH for DeFi protocols and has subsequently engaged in lending activities through Aave's platform.