The Ethereum Foundation (EF) has made a strategic pivot in its treasury management by borrowing $2 million in GHO stablecoins from Aave Protocol, signaling a potential end to its controversial ETH sell-offs. This move marks the foundation's first public foray into decentralized borrowing and reflects growing institutional adoption of DeFi mechanisms.

DeFi Integration Reaches New Milestone

On May 29, Aave founder Stani Kulechov revealed the transaction through an X post, noting the EF completed "the full DeFi circle" by both supplying ETH collateral and borrowing against it. GHO represents a new class of decentralized stablecoins, with its parameters governed by Aave's DAO rather than centralized entities.

The foundation's borrowing strategy demonstrates several advantages: ——No ETH liquidation required for operational funding—— ——Earning yield on collateral while accessing liquidity—— ——Participation in DeFi ecosystem growth——

$120 Million Precedent Set Earlier

This development follows the EF's February deployment of 【45,000 ETH】($120 million) across Aave, Spark, and Compound. Kulechov previously hailed this as DeFi's institutional validation, with the latest borrowing activity reinforcing the foundation's commitment to decentralized financial tools.

Community response has been overwhelmingly positive, with Ethereum Improvement Proposal co-author Eric Conner applauding the shift from "insane" ETH dumping to sophisticated asset utilization. The change addresses long-standing criticisms about the foundation's market impact through direct ETH sales.

Technical Breakthrough in Treasury Management

GHO's overcollateralized model requires 125% collateralization, meaning the EF likely deposited at least $2.5 million in ETH to secure the loan. This approach mirrors strategies used by DAOs like MakerDAO, but marks a first for major blockchain foundations.

Industry observers note three key implications: • Reduced sell pressure on ETH markets • Increased protocol revenue for Aave • Validation of DeFi's institutional readiness

As of press time, the EF maintains silence on whether this represents a permanent funding strategy shift. However, blockchain analytics show the foundation's wallet continues actively engaging with multiple DeFi protocols, suggesting deeper integration may follow.

Broader Trend in Crypto Finance

The move coincides with growing institutional interest in DeFi yield strategies. Traditional finance giants like BlackRock have recently explored Ethereum-based tokenization, while the total value locked in DeFi protocols has rebounded to 【$95 billion】 after 2022's market downturn.

——This strategic pivot may redefine how blockchain projects manage treasuries——, potentially sparking similar moves by other foundations. The development particularly benefits Aave, whose GHO stablecoin gains credibility through high-profile adoption.

Market data shows ETH price stability following the news, contrasting with previous dips after foundation sell-off announcements. This reaction suggests investors view DeFi utilization as preferable to direct asset liquidation.