The community rejoiced when the Ethereum Foundation deployed 45,000 ETH to the decentralized finance protocols Aave, Spark, and Compound.
In response to community concerns regarding the Ethereum organization’s reliance on ETH sell-offs for funding, the organization donated $120 million of Ether to decentralized finance (DeFi) protocols.
The multisignature account of the Ethereum Foundation deposited 4,200 Ether on February 13.
30,800 ETH went into Aave, 10,000 ETH went into Spark, and 2,654 ETH went into Compound. The total value of the 45,000 ETH deployed was around $120.4 million, given that ETH was trading at about $2,600.
The Ethereum Foundation’s “biggest allocation in DeFi” is the 30,800 ETH (about $82.4 million) invested in Aave Prime and Core, according to founder and CEO Stani Kulechov. Additionally, Kulechov expressed hope when the foundation provided financing to Aave, saying, “DeFi will win.”
Besides Kulechov, many community members applauded the action since it would lessen the necessity for the foundation to sell Ethereum to raise money for expenses.
The community celebrates the Ethereum Foundation’s $120 million deployment.
Aave is the “beating heart of lending,” and lending is the “beating heart of DeFi,” according to podcaster Mark Jeffrey, who called the move “smart.”
Seeing the development as a victory, an X user urged the community to “keep it up” since their actions were practical. Another user, meanwhile, stated that if the Ethereum Foundation kept using their money this way, it would be “a positive thing.”
The pseudonymous co-founder of the lending protocol HyperLend, 0xNessus, claimed it was absurd that the foundation had only recently begun interacting with DeFi apps after a long period. “We only needed to intimidate them,” the executive wrote on X.
The sale of ETH by the Ethereum Foundation has drawn criticism.
The Ethereum Foundation came under fire in January for using ETH sales to pay its employees and fund running costs.
Eric Conner, a co-author of the Ethereum Improvement Proposal (EIP-1559), stated that “dumping ETH” was the foundation’s top use case. Instead of selling their cryptocurrency assets directly, which many believe will hurt its price, Anthony Sassano, host of The Daily Gwei, proposed using Aave to stake and borrow capital against their ETH.
Concerns over the foundation staking its ETH were previously addressed by Vitalik Buterin, who brought up regulatory ambiguity and the risk of being pressured into taking a position on prospective Ethereum hard forks.
However, the Ethereum Foundation stated in a post that there will be “more to come,” suggesting that this may not be the final capital deployment. The group also mentioned that it is already investigating staking and soliciting recommendations from the community.
