Ethereum Foundation’s Treasury Shrinks to $650 Million

The Ethereum Foundation, the primary non-profit organization supporting the Ethereum blockchain, is facing a significant reduction in its treasury. Justin Drake, a prominent researcher at the foundation, recently disclosed that the organization’s main Ethereum wallet currently holds about $650 million. This revelation comes as the foundation prepares to release an updated financial report in the near future.

The current balance represents a substantial decrease from the foundation’s financial position in March 2022, when its treasury held approximately $1.3 billion worth of Ether (ETH). This decline can be attributed to two main factors: the foundation’s ongoing expenses and the decrease in ETH’s market value. Drake, posting under the Reddit handle “bobthesponge1,” shared that the Ethereum Foundation spends roughly $100 million per year. Based on current holdings and expenditure rates, he estimates that the foundation has about a 10-year runway, though this timeline is subject to fluctuations in ETH’s price.

Drake also shed light on the foundation’s financial management strategies. He mentioned that the organization maintains a fiat currency buffer sufficient to cover a couple of years of expenses. Interestingly, he noted that ETH sales were temporarily halted due to regulatory concerns, which prevented the replenishment of this buffer until recently. This insight provides a glimpse into the complex financial and regulatory landscape that blockchain-focused organizations must navigate.

Perhaps most striking is Drake’s response to a question about the foundation’s long-term financial sustainability. When asked if there was a plan in place for when the foundation’s funds run out, Drake simply replied, “I’m not aware of any plan to sustainability :)”. This candid admission raises questions about the long-term viability of the Ethereum Foundation’s current financial model and its implications for the broader Ethereum ecosystem. As one of the most influential organizations in the cryptocurrency space, the foundation’s financial health and strategies are of significant interest to the entire blockchain community.

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