The Ethereum Foundation, a nonprofit that supports Ethereum’s development, introduced a new plan for its treasury reserves on June 5, 2025. It aims to cut its yearly spending from 15% of total assets to 5% by 2030. 

The policy also outlines the use of treasury funds in DeFi projects. This move is designed to ensure the foundation has sufficient resources for future needs while continuing to support the Ethereum network.

New Spending and Investment Strategy

Under the updated rules, the foundation will change how it spends and invests its Ether. Rather than selling a fixed amount each year, it will rely on an operating buffer. 

This buffer calculates how much ETH is needed to cover expenses over a set period. By doing this, the foundation can decide to sell or invest ETH based on its spending needs and broader market trends. This approach aims for stability, especially during market swings.

Adjusting Ether Sales

Moving away from a fixed sale amount, the foundation will now look at its budget needs first. If the buffer shows that more funds are needed, it will sell ETH. If not, it will keep or invest the coins. 

This change helps the foundation avoid selling too much ETH when prices are low. It also stops excessive selling when markets are hot, so it can act against the market rather than follow it.

Focusing on DeFi and Privacy

A large part of the new policy is investing in DeFi protocols and privacy-focused tools. The foundation believes these areas fit well with Ethereum’s core values.

Also Read: Ethereum Foundation Cuts Core Team as Part of Major Internal Reorganization

It will stake ETH and use wrapped ETH (wETH) in audited DeFi platforms that meet its security standards. The goal is to earn returns on its holdings while supporting projects that align with Ethereum’s ethos. This shift signals a more active approach to managing treasury funds.

Internal Changes and Future Upgrades

Earlier this week, the foundation made some internal adjustments. It trimmed parts of its research and development team and renamed its Protocol Research and Development division to just “Protocol.” 

The change aims to put more focus on scaling solutions and usability work. At the same time, Ethereum is gearing up for major upgrades. 

These include wider adoption of Layer 2 scaling solutions and improvements in privacy and speed. The foundation’s updated treasury plan is meant to support those efforts.

Managing Fiat Reserves

While ETH remains the treasury’s main asset, the foundation is also widening its holdings. It plans to add tokenised real-world assets and high-quality bonds. 

Investments should bring stability to the portion of reserves held in fiat currencies. The foundation’s goal is to balance its portfolio so it can weather market dips and maintain enough funds for key projects.

Transparency and Reporting

The foundation has pledged to keep its process open. Each year, it will release a full report on how it divides its assets among fiat, idle ETH, and deployed ETH. 

Board members and senior managers will also receive detailed updates every quarter. These updates will cover performance, risk factors, and how the treasury supports the broader Ethereum ecosystem.

Also Read: Ethereum Foundation Allocates $32.65M in Q1 2025 to Strengthen Ecosystem Development