- The Ethereum Foundation (EF) has borrowed $2 million from DeFi platform Aave
- EF borrowed the funds in Aave Protocols GHO tokens and used wrapped ETH as collateral
- Aaves Stani Kulechov described the move as the full DeFi circle
Three months after depositing $120 million into multiple DeFi platforms, the Ethereum Foundation (EF) has borrowed $2 million from DeFi platform Aave. The foundation borrowed the funds in the form of Aave Protocols GHO stablecoin and used wrapped ETH as collateral. According to Aave founder Stani Kulechov, the foundation is supplying ETH and also borrowing from Aave, a phenomenon he described as the full DeFi circle.
Looping on Aave
Revealing the development in an X post, Kulechov said that the next step is looping on Aave, where EF swaps, borrows, and stakes multiple cryptos to boost returns. The Aave Chain Initiative founder Marc Zeller also commented on the development, saying EF didnt have to sell a single ETH to fund [its] objectives.
Zeller added that the DeFi platform is designed for holders with [a] conviction. Other crypto community members who commented on the move said it encourages the organic growth of the DeFi ecosystem, while others noted that EF isnt just building the future of finance its now operating inside of it.
An X user even questioned why EF didnt embrace this tactic sooner instead of selling, with another saying the move is DeFi conviction in action.
Ethereum Foundation Criticized
EFs move comes a few months after the Ethereum community criticized the foundation for liquidating its ETH reserve to cover operating costs. The foundation has in the past announced plans to increase its support for Ethereum-based DeFi and dApp developers.
It also comes three months after EF announced a new leadership and barely a month after it overhauled its leadership structure to separate powers by introducing a board of directors and a management team.
With EF borrowing from a DeFi platform, its to be seen whether itll always turn to borrowing from a DeFi platform each time it needs funds to settle its operating costs.
