Ethereum Foundation Reveals $788M Crypto Holdings And New Conflict-Of-Interest Rules

The Ethereum Foundation (EF) released its annual financial report earlier today, revealing substantial holdings and a commitment to transparency and long-term sustainability.

Ethereum Foundation Holdings

As of October 31, 2024, the EF disclosed that its treasury holds approximately $970.2 million, with $788.7 million in crypto assets and $181.5 million allocated to non-crypto investments and assets.

Notably, nearly 99.45% of the EF’s crypto holdings are in Ethereum (ETH), representing 0.26% of the total circulating supply of ETH.

In its report, the EF emphasized a conservative treasury management policy designed to weather market volatility and ensure the availability of resources during extended market downturns. They noted in the report:

We choose to hold the majority of our treasury in ETH. The EF believes in Ethereum’s potential, and our ETH holdings represent that long-term perspective.

To sustain this approach, the EF “periodically” sells portions of its ETH holdings, building up fiat reserves during bullish market conditions to finance spending needs during bearish phases.

1/ Introducing the Ethereum Foundation Report, 2024 Edition. Learn more about EF, our recent work, Ethereum’s ecosystem of funders, new organizations and policies. The full report is here: https://t.co/koL7Et0n6B pic.twitter.com/uhbzsngaWD

— Aya Miyaguchi (ayamiya.eth) (@AyaMiyagotchi) November 8, 2024

It is worth noting that the EF’s transparency about this motive comes against the backdrop of past scrutiny and community reactions regarding large transactions and ETH sales by the foundation without prior notice, leading to calls for clearer communication.

Tightening Conflict Of Interest Rules For Staff Members

The Ethereum Foundation also introduced enhanced measures to address potential conflicts of interest among its team members. According to the updated policy, EF staff members, referred to as “EFers,” may engage in external work but must disclose their involvement and seek approval from their team leads.

For engagements with a total value exceeding $25,000 annually, a review by an internal discussion group is mandated. The policy specifically prohibits EF staff from accepting compensation in illiquid assets with uncertain market value, such as advisory token packages for pre-launch projects, unless a rare exception is granted.

The report also highlights that the EF’s primary mission is to fund and support public goods for the Ethereum network. Expenditures in 2023 included $47.4 million dedicated to “new institutions” aimed at boosting the ecosystem, a significant increase from $28.6 million in 2022.

Additionally, the EF invested $34.7 million in Layer 1 research and development, up from $32.1 million in the previous year. Aya Miyaguchi, the executive director of the Ethereum Foundation, emphasized the foundation’s long-term approach, stating:

EF’s long-term thinking keeps us focused on supporting a sustainable and open ecosystem. We’re more committed than ever to planting seeds that may only mature years down the line, ensuring Ethereum’s resilience and collaborative growth.