Ethereum Foundation Turns to DeFi for Treasury Funding, Borrows $2M in GHO from Aave
The Ethereum Foundation (EF) is signalling a major pivot in its financial management. It is opting to borrow funds through decentralised platforms rather than liquidating its crypto holdings. In its latest move, the Foundation has borrowed $2 million worth of GHO—Aave’s decentralised, overcollateralized stablecoin directly from the Aave protocol.
Aave founder Stani Kulechov announced the development on May 29 via X, highlighting the Foundation’s evolving engagement with the DeFi ecosystem. “The Ethereum Foundation now supplies and borrows via Aave — it’s a complete DeFi loop,” he commented.
This move builds on EF’s earlier DeFi initiative in February 2025, when it deployed approximately 45,000 ETH (around $120 million) into protocols like Aave, Spark, and Compound. That allocation marked EF’s largest investment in decentralised finance to date.
Historically, the Ethereum Foundation’s direct sales of ETH to fund its operations have stirred community backlash due to their impact on price stability. Key Ethereum voices like EIP-1559 contributor Eric Conner and The Daily Gwei’s Anthony Sassano have publicly urged EF to consider more sustainable treasury models, such as staking or borrowing against assets.
Conner previously labelled the Foundation’s ETH liquidations as “insane,” stressing the need for better capital strategies. Now, with this recent borrowing from Aave, EF appears to be taking that advice seriously, shifting toward methods that preserve its ETH holdings and reduce market disruption.
GHO, the stablecoin EF borrowed, is governed by Aave’s decentralised autonomous organisation (DAO), which determines lending conditions, collateral levels, and interest rates. By utilising this structure, the Foundation not only retains its ETH exposure but also taps into a more flexible and decentralised financial system.
This development could mark the beginning of a more strategic and less disruptive financial management era for EF — one that aligns with the broader Ethereum community’s vision of long-term sustainability through decentralised infrastructure.
As previously noted, Ethereum’s price has been approaching the $3,000 mark, driven in part by accumulation from large holders and renewed confidence in the network’s future.