The Ethereum Foundation (EF) released its annual financial report this morning, revealing its significant holdings and commitment to transparency and long-term sustainability.
Ethereum Foundation Holdings
As of October 31, 2024, EF disclosed that the Treasury held approximately $970.2 million, of which $788.7 million was in cryptocurrency assets and $181.5 million was allocated to non-cryptocurrency investments and assets.
Notably, nearly 99.45% of EF’s cryptocurrency holdings are in Ethereum (ETH), which accounts for 0.26% of the total ETH circulating supply.
In the report, EF highlighted its conservative financial management policies designed to overcome market volatility and ensure resource availability during prolonged market downturns. They noted in their report:
We decided to hold most of our funds in ETH. EF believes in the potential of Ethereum, and our ETH holdings represent that long-term view.
To maintain this approach, EF “regularly” sells a portion of its ETH holdings, building up fiat reserves during bull market conditions to fund spending needs during bear market conditions.
1/ Introducing the Ethereum Foundation Report, 2024 edition. Learn more about EF, its recent work, Ethereum’s funder ecosystem, and 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’s worth noting that EF’s transparency about these motivations comes against the backdrop of past investigations and community reactions to the foundation’s large-scale, unannounced transactions and sales of ETH, so clearer communication is required.
Strengthening conflict of interest rules for employees
The Ethereum Foundation has also introduced enhanced measures to address potential conflicts of interest among team members. According to the updated policy, EF employees, referred to as “EFers,” can participate in external work, but must disclose their participation and receive approval from their team leaders.
For contracts with a total value exceeding $25,000 per year, review by an internal discussion group is mandatory. This policy specifically prohibits EF employees from receiving compensation for 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 EF’s primary mission is to fund and support public goods for the Ethereum network. The 2023 spending includes $47.4 million for “new institutions” aimed at strengthening the ecosystem, a significant increase from $28.6 million in 2022.
EF also invested $34.7 million in layer 1 research and development, up from $32.1 million the previous year. Aya Miyaguchi, Executive Director of the Ethereum Foundation, emphasized the foundation’s long-term approach:
EF is focused on supporting sustainable and open ecosystems through long-term thinking. We are more committed than ever to ensuring the resilience and collaborative growth of Ethereum, planting seeds that may only mature in a few years.
Featured image created with DALL-E, chart from TradingView