The Ethereum Foundation (EF) has announced its intention to convert 1,000 ether (ETH) into stablescoins to financial research, subsidies and donations, aligning with its wider cash strategy and its participation in the financing of decentralized financing initiatives (DEFI).
The sale, worth around 4.5 million dollars at current prices, was executed via a cow swap, a decentralized negotiation protocol which brings together liquidity on several exchanges to offer users competitive prices without counting on a centralized intermediary.
Neither the announcement of the Foundation nor its cash policy specified the stablescoins which it would receive in exchange for the ETH.
This last conversion follows the previous disclosure of EF in September that it planned to convert 10,000 ETH to Stablecoins over several weeks. However, Friday’s transaction seems to be separated from this initiative, given its smallest scale and its use of the exchange of cows rather than centralized exchange.
According to the Treasury policy of the Ethereum Foundation, EF seeks to “balance the yields above a reference rate and extend the role of the EF as a guardian of the Ethereum ecosystem, with a particular accent on DEFI.”
The increased use of stablescoins also comes while the EF temporarily interrupted subsidies of subsidies open to its program to support the ecosystem, citing an influx of requests. The Foundation said that it would rather favor the financing of the most urgent needs of the network.
In April, EF also announced a restructuring of leadership to improve strategic and operational management. The Foundation appointed Hsiao-Wei Wang and Tomasz K. Stańczak as co-directors, who had both played roles within the EF. In June, the Foundation dismissed the staff and restructured its basic development team.
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Vitalik Buterin Double on Defi
Since its launch, Ethereum has remained the main platform for DEFI applications. Despite increasing competition from other blockchain networks, Ethereum still represents around 68% of the total locked value (TVL) on DEFI platforms, according to industry data.
The co-founder of Ethereum, Vitalik Buterin, recently reiterated the accent put by the network on decentralized finances, arguing that the “low-risk” DEFI applications could help create more sustainable income for ecosystem, similar to the way Google is looking for the Google business model.
“DEFI at low risk can play a similar role for Ethereum,” wrote Buterin, pointing to “the basic functions of payments and savings, and well -understood tools such as synthetic assets and fully guaranteed loans.”
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