The Ethereum Foundation (EF) has borrowed $2 million in GHO, a decentralized stablecoin developed by Aave, in a move signaling deeper engagement with decentralized finance (DeFi) strategies.
In a May 29 X post, Aave founder Stani Kulechov said the foundation borrowed $2 million in GHO tokens. “The EF is not only supplying ETH to Aave, but also borrowing from Aave,” Kulechov wrote, describing the development as “the full DeFi circle.”
GHO is a decentralized, overcollateralized stablecoin native to the Aave Protocol. Unlike centralized stablecoins, GHO is governed by Aave’s decentralized autonomous organization (DAO), which oversees interest rates, collateral requirements and facilitator selection.
The move highlights the EF’s growing engagement with the DeFi ecosystem, moving toward more sophisticated treasury strategies.
The foundation did not immediately respond to a request for comment.
Ethereum Foundation previously deployed $120 million in DeFi
The foundation’s move to borrow GHO follows a previous $120 million deployment into various protocols, signaling a shift in how it manages its crypto holdings.
In February, the EF deployed 45,000 Ether (ETH) across different DeFi protocols, including Aave, Spark and Compound. At the time, the Ether was worth $120 million.
Kulechov previously described the fund deployment as the foundation’s “biggest allocation in DeFi.” Because of the move, the Aave founder said that DeFi will win, expressing optimism as the EF added liquidity to the protocol.
Apart from Kulechov, community members also celebrated the move, supporting the EF’s ETH holdings management shift. A community member said the development was a win and that the foundation should “keep it up,” while an X user said it would be positive if the EF continued to use their funds this way.
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Criticisms of the foundation selling Ether
In January, Ethereum community members called on the foundation to explore alternatives to selling ETH for operational funding. The community suggested DeFi tools like staking and borrowing stablecoins against ETH.
Eric Conner, co-author of EIP-1559, criticized ETH selling, saying that the foundation’s primary use case seemed to be dumping its holdings. He called the practice “insane,” urging the EF to stake or use DeFi instead of selling.
Anthony Sassano, host of The Daily Gwei, proposed that the EF stake part of its ETH and sell the staking rewards. The community member also floated the idea of using Aave to borrow stablecoins against its holdings.
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