Ethereum Foundation transfers $165M to new multisig wallet

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Grafa2025/01/27 09:00

By:Isaac Francis

The Ethereum Foundation (EF) has taken a significant step toward engaging with decentralised finance (DeFi) by launching a multisig wallet.

This initiative involves transferring 50,000 ETH (CRYPTO:ETH), valued at approximately $165 million, into the newly established wallet.

According to Hsiao-Wei Wang, a recent appointee at the foundation, the wallet operates under a 3-of-5 multisig configuration managed via Safe, previously known as Safe Gnosis.

This move is seen as a response to ongoing concerns about the foundation's transparency in treasury management.

Frequent sell-offs of ETH by the foundation to cover operational costs have drawn criticism for exerting downward pressure on the asset's price.

As a result, there have been calls for the EF to explore alternatives like staking or deploying ETH holdings on-chain to generate returns and better meet its financial needs.

The foundation’s treasury has decreased by 39% over the past three years, now totaling $970.2 million as of October 31, 2024.

A financial report indicated that 81.3% of this treasury is held in cryptocurrency, predominantly in ETH.

Despite these holdings, Vitalik Buterin, co-founder of Ethereum, revealed that the foundation has avoided staking due to regulatory concerns and the desire to maintain neutrality during potential network forks.

In light of recent scrutiny regarding its leadership amid increasing competition from other platforms like Solana, Buterin acknowledged that reforms are underway to improve technical expertise and communication within the organisation.

He emphasised that the EF does not plan to shift its ideological stance or adopt centralised governance.

Additionally, Joseph Lubin proposed a dual-leadership structure to balance technical and business strategies moving forward.

The establishment of this multisig wallet marks a strategic effort by the Ethereum Foundation to enhance its participation in DeFi while addressing transparency and treasury management challenges.

At the time of reporting, the Ethereum (ETH) price was $3,175.29.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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The Block•2025/02/02 17:11