- Ethereum Foundation’s new treasury formula ties reserves to operating costs, enabling calculated ETH-to-stablecoin conversions for risk management.
- Counter-cyclical operations will provide stronger support during downturns and balanced activity in rising markets per policy.
The Ethereum Foundation implemented a new treasury management policy on June 4. This plan establishes rules for reserve allocation, investment in decentralized finance protocols, and privacy standards. It replaces the foundation’s previous informal capital approach.
Announcing the Ethereum Foundation Treasury Policyhttps://t.co/bU566m1zX5
— Ethereum Foundation (@ethereumfndn) June 4, 2025
The policy introduces a dual-variable formula to determine financial reserves. This formula calculates required fiat holdings by multiplying 2.5 years of projected operating costs by an annual 15% expense buffer.
The result dictates how much Ethereum can convert to stable assets. Treasury operations will now follow counter-cyclical principles: increasing support during market declines and moderating activity during rallies.
While Ethereum remains the primary treasury asset, the guidelines permit broader on-chain exposure. This includes staking, lending activities, tokenized real-world assets, and specific DeFi protocols. The foundation seeks income generation while managing risk and upholding Ethereum’s neutrality principles.
Privacy standards form a core component of the policy
The foundation describes privacy as “a critical civil liberty” within increasingly monitored financial systems. It expresses concern about know-your-customer (KYC) restricted applications, centralized interfaces, and excessive reliance on off-chain legal safeguards.
To enforce these standards, the foundation created an evaluation system named “Defipunk.” This system assesses potential DeFi partners using four criteria: unrestricted access, user-controlled asset storage, open-source licensing, and privacy-preserving transaction features.
Protocols not meeting all criteria may still qualify by demonstrating progress toward these objectives. This represents an institutional effort to formalize ethical benchmarks in incentive-driven DeFi environments.
Ethereum (ETH) is trading at approximately $2,649 USD, having recently bounced off its 20-day EMA at $2,528. This rebound signals renewed bullish momentum as traders now set their sights on a potential breakout above $2,738, which could pave the way for a move toward the $3,000 psychological resistance level. However, if ETH fails to hold above the $2,528 support, downside targets around $2,323 could come into play in the short term.
In the last 12 hours alone, the Ethereum network registered $799 million in transactions, including a notable over-the-counter purchase of 108,278 ETH (worth around $283 million) by a whale or institutional entity. This signals growing institutional confidence in Ethereum’s long-term value, especially amid renewed focus on tokenization and scaling via Layer 2 networks.
