Ethereum Foundation Embraces DeFi to Avoid ETH Sell-Offs
$2M Borrowed in GHO as Foundation Deepens On-Chain Finance Strategy
In a major shift in how it manages its crypto treasury, the Ethereum Foundation (EF) has borrowed $2 million in GHO stablecoins through Aave, signaling a more strategic embrace of decentralized finance (DeFi) over liquidating its ETH holdings.
Stani Kulechov, founder of Aave, confirmed the move in a May 29 post on X, calling it “the full DeFi circle” — a reference to the EF both supplying ETH and now borrowing stablecoins from Aave.
Source: Stani Kulechov
From Selling to Staking: Ethereum Foundation Shifts Strategy
The borrowing of $2 million in GHO, a decentralized, overcollateralized stablecoin governed by the Aave DAO, signals that the foundation is turning to DeFi tools instead of selling ETH to fund operations.
This isn’t EF’s first move into DeFi. Back in February, the foundation deployed 45,000 ETH — then worth $120 million — into multiple DeFi protocols including Aave, Compound, and Spark. Kulechov called it the foundation’s “biggest allocation in DeFi.”
By locking ETH and borrowing against it instead of selling it, the EF now joins a growing number of institutional players leveraging DeFi for capital efficiency without market disruption.
Community Applauds EF’s DeFi-First Approach
The move has been widely supported across the Ethereum ecosystem. One user on X called it “a win” and encouraged the foundation to “keep it up,” while others praised the use of DeFi-native solutions to fund operational costs.
For many in the Ethereum community, it’s a welcome alternative to the direct selling of ETH — a practice that had drawn criticism earlier this year.
Critics Once Slammed ETH Liquidation Strategy
In January, Ethereum core figures and supporters openly criticized the EF for selling ETH to cover expenses.
Eric Conner, co-author of EIP-1559, called the practice “insane”, urging the foundation to stake its ETH or borrow stablecoins rather than creating downward price pressure. Anthony Sassano, host of The Daily Gwei, similarly recommended staking ETH and selling the rewards or borrowing against it on DeFi platforms.
These ideas now appear to be shaping the EF’s evolving treasury model.
Ethereum Treasury Now A DeFi Power User
The foundation’s treasury moves are more than just financial strategy — they’re a signal of maturity in the DeFi space. By deploying hundreds of millions in capital to DeFi-native protocols and borrowing stablecoins like GHO, the EF is helping set the tone for responsible, long-term crypto treasury management.
It’s also a vote of confidence in Ethereum’s own financial infrastructure — a subtle but powerful endorsement of the network it oversees.
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