Ethereum Foundation Begins Staking Treasury ETH to Boost Network Security

• The Ethereum Foundation will start to stake the Ether it holds in its treasury, currently at over 172,000 tokens, to boost network security.
• It staked over 2,000 ETH today, and expects to channel 70,000 tokens initially, with the yield directed back to the Treasury.

The Ethereum Foundation is taking a more active role in protecting and governing the network, pledging to stake up to 70,000 ETH from its Treasury in the long term.

The Foundation announced the move today, revealing that it had made its first deposit of 2,016 ETH on the mainnet deposit contract. As CNF reported last week, this contract now holds over 50% of all the ETH supply for the first time in the network’s history.

The staking aligns with the Foundation’s new Treasury Policy, which it announced in June last year. The policy cut operating expenses to a maximum of 15% of the treasury annually and a requirement for 2.5-year runway of reserves at any one time. Most importantly, it shifted the direction from passive holding to active management, including staking and deploying some ETH on vetted DeFi protocols.

Staking the ETH will allow the Foundation to generate new income to fund operations at a time when it has continued to cut back on many services it has previously funded, as CNF detailed. It intends to stake a maximum of 70,000 ETH for now, which at the average return for validators of 4%, should return 2,800 ETH annually, or just over $5 million at current prices.

Ethereum Foundation Takes an Active Role

According to its announcement, the Foundation settled on two open-source software services for its staking: Dirk and Vouch. Dirk will offer distributed signing services to protect the Foundation against having a single point of failure, while Vouch will pair multiple clients with strategies used to mitigate risks arising from client diversity. Vouch is developed by Attestant, which was acquired by Bitwise in 2024 to provide institutional-grade staking services.

The 70,000 that the Foundation intends to stake accounts for less than half its Treasury holdings, which according to data from Arkham, stand at 172,653 ETH, worth $315 million at press time. It also holds wrapped Ethereum worth $19 million, and $38 million worth of AETHWETH, the token you receive for depositing wETH on Aave.

The Foundation commented:

The Ethereum Foundation’s approach is unique in crypto. Most networks’ primary development foundations have steered clear of active participation, supporting their networks through issuing grants, organizing hackathons, developing new tools and initiating partnerships with other parties.

In instances when these foundations have taken an active role, it has sparked conflict with other ecosystem organizations. The most recent example is the Aave ecosystem where the Aave Labs, which is supposed to be the nonpartisan organization working to promote the network’s adoption, went to war with BGD Labs, the technical developers. It ended in BGD leaving the ecosystem, as CNF reported.