The Ethereum Foundation has converted 1,000 ETH, worth approximately $4.5 million, into stablecoins as part of a larger strategy to support research, grants, and decentralized finance (DeFi) development across the Ethereum ecosystem.
Key Takeaways
- Ethereum Foundation sold 1,000 ETH using CoWSwap’s TWAP feature, ensuring minimal market disruption and supporting DeFi tools.
- The conversion is part of a broader plan to diversify its treasury, which included a previous announcement to convert 10,000 ETH.
- Funds will be used to back R&D, ecosystem grants, and donations, with an emphasis on sustainability and financial stability.
- The move reflects a shift toward professional, DeFi-aligned treasury management, aiming for long-term resilience and independence.
What Happened?
The Ethereum Foundation (EF) has executed a sale of 1,000 ETH through CoWSwap, a decentralized trading platform, utilizing its time-weighted average price (TWAP) strategy. The transaction, valued at $4.5 million, is designed to fund ongoing research and grants while highlighting the strength of Ethereum’s DeFi infrastructure. This conversion is part of a larger strategy announced in September 2025, where the Foundation revealed plans to gradually convert up to 10,000 ETH into stablecoins.
1/ Today, The Ethereum Foundation will convert 1000 ETH to stablecoins via 🐮 @CoWSwap‘s TWAP feature, as part of our ongoing work to fund R&D, grants and donations, and to highlight the power of DeFi.
— Ethereum Foundation (@ethereumfndn) October 3, 2025
Foundation Embraces DeFi for Treasury Execution
In a nod to its support for decentralized finance, EF used CoWSwap’s TWAP tool to avoid large single-point sales that could impact market prices. The move follows community criticism earlier this year after EF executed parts of its 10,000 ETH conversion through centralized exchanges like Kraken. Responding to that feedback, this latest sale not only reduces reliance on centralized platforms but also aligns with Ethereum’s mission of decentralization.
- The TWAP strategy helped reduce volatility and preserve price stability during the sale.
- Ethereum’s stablecoin market now exceeds $170 billion, supporting deep liquidity for large trades.
Long-Term Vision with Endowment-Style Treasury
The Foundation’s treasury policy, updated in June 2025, focuses on building a sustainable funding runway while reducing its dependence on ETH’s price volatility. Currently, EF operates with an annual budget of 15 percent of its treasury. However, it plans to scale that down to 5 percent by 2030, aligning with traditional endowment models.
- The goal is to maintain a 2.5-year funding runway for R&D and grants.
- EF has paused open grant applications temporarily to handle internal restructuring and prioritize urgent ecosystem needs.
Leadership Changes and Strategic Refocus
This financial shift comes alongside key organizational changes. Earlier this year, Hsiao-Wei Wang and Tomasz K. Stańczak were appointed as co-executive directors. In June, EF also undertook a staff restructuring to better align with its long-term objectives. These moves signal a tightening of strategic focus and operational efficiency at a time when Ethereum is navigating growing competition in the blockchain space.
Vitalik Buterin’s Vision for “Low-Risk” DeFi
Ethereum co-founder Vitalik Buterin has championed “low-risk” DeFi applications such as savings, payments, and lending as essential to Ethereum’s financial sustainability. He compares them to how Google Search supports the tech giant’s revenue, suggesting that ethical and steady-income applications could form a similar financial backbone for Ethereum.
“Low-risk DeFi can and should play a similar role for Ethereum,” Buterin said, emphasizing that practical, sustainable applications can align profit with purpose.
Ethereum Still Leads DeFi Landscape
Despite growing competition, Ethereum continues to dominate the DeFi space, holding around 68 percent of total value locked (TVL). In late September, Ethereum DeFi surpassed $100 billion in TVL, marking its highest daily total since early 2022. The Foundation’s strategic treasury management is aimed at reinforcing that leadership by ensuring a stable source of capital to fund its ecosystem.
CoinLaw’s Takeaway
In my experience covering crypto’s institutional side, this move by the Ethereum Foundation isn’t just smart, but it’s necessary. Crypto cycles are unpredictable, and a treasury built purely on volatile assets like ETH can be risky, especially during downturns. What I found particularly compelling is how the Foundation is finally syncing its mission with its methods, moving away from centralized exchanges and using DeFi tools to make DeFi stronger. This kind of self-reinforcing ecosystem is exactly what Ethereum needs to stay ahead. I also respect the long-term thinking here. Stabilizing annual spend and securing years of runway gives builders confidence and brings credibility to Ethereum’s roadmap.
