Ethereum Foundation has releasedits first report to reveal the treasury holdings, explaining that it follows a “conservative treasury management policy” to ensure funding for the core objectives
Ethereum Foundation criticism
On more than one occasion, crypto commentators, including trader Edward Morra, have pointed out that the non-profit has been successfully timing the market, to cash out Ethereum
Friendly reminder that ETH foundation cashed out at the top (again). ETH down 40+% since then pic.twitter.com/Bp80hEDvK0
— Edward Morra (@edwardmorra_btc) January 21, 2022
Casual 20k ETH cashout by EthDev, sent to Kraken:https://t.co/w6AbdeW2AJ
They cashed out 35k ETH on 17th of May this year, marked on the chart ?? pic.twitter.com/sTbUwHSzD4
— Edward Morra (@edwardmorra_btc) November 11, 2021
As per the , the foundation held a treasury of around $1.6 Billion, out of which, $1.3 Billion were in crypto holdings at the end of March. The non-profit also stated that during the same period, 99.1% of their crypto holdings were held in ETH, marking close to 0.297% of the total ETH supply.
According to Aya Miyaguchi, Executive Director of the Ethereum Foundation, they want to explain the ‘reasoning and philosophy’ that decide their course of action. Miyaguchi commented, “Beyond allocating financial support, there are many important stories to tell about how EF teams contribute to the ecosystem. There is a lot of non-financial work that EF community members do behind the scenes as well.”
The Executive Director also agreed that “we are not a normal top-down organization.”
Not your usual non-profit
The foundation is behind the Ethereum project which argues that it is not a typical non-profit or even a company. Instead, the organization maintains that, “Their role is not to control or lead Ethereum, nor they are the only organization that funds critical development of Ethereum-related technologies. The EF is one part of a much larger ecosystem.”
In the report, EF explains that it follows a “conservative treasury management policy” to ensure funding for the core objectives even during a multi-year market downturn. It noted, “This part of our budget is immune to changes in the price of ETH on a significant timeline. “
Ethereum’s performance and EF cash out
The crypto market that surpassed a $3-trillion cumulative market capitalization last year, has been on a struggling road to recovery with the cryptocurrency market cap close to $1.92 trillion today. Meanwhile, Ethereum has been down 5% in the last 24 hours and over 17% in the last two weeks, according to CoinGecko
Lately, Ethereum has also lost a significant market share when it comes to Total Value Locked (TVL) on decentralized applications on the network. As per Defillama, Ethereum now only claims 55% of the total TVL. While it remains the leader in the top spot, Ethereum dominated close to 70% of the total TVL till last year.
When it comes to criticism around EF profiting at its peaks, the foundation clarified its stance. According to them, ‘they increase their non-crypto savings in response to rising ETH prices, which provides a greater safety margin for their core budget and funding non-core but high leverage projects through a market downturn.’
This essentially means that EF agreed that it sold the Ethereum tokens in a bull market to contribute to its non-crypto holdings.
Meanwhile, the foundation also reiterated, “The EF believes in Ethereum’s potential, and our ETH holdings represent that long-term perspective.”
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