The Ethereum Foundation (EF) took a quiet tactical step into Defi by borrowing $2 million GHO Stablecoins, using wrap ETH (WETH) as collateral for the Aave protocol.
Marc Zeller, founder of the Aavechan Initiative, shared the development on May 29, saying that GHO’s foundation use is consistent with Aave’s core value proposals and that ETH owners can unlock liquidity without leaving their position.
He said:
“They didn’t have to sell a single ETH to fund their goals. Aave is designed for convicted holders.”
Stani Kulechov, founder of Aave Protocol, reflected this sentiment. He emphasizes that EF supplies ETH and borrows it on Aave, calling it a demonstration of Defi’s complete utility cycle.
The Ethereum Foundation has not officially commented on the transaction as of the time of reporting.
However, the Crypto community has substantial support for its strategy and sees it as a careful approach to financial management and long-term sustainability.
Maksym Blazhkun, co-founder of Wenode, said:
“Borrow without selling – that’s a defi belief in action. The Ethereum Foundation plays it smartly with aave.”
According to Defillama data, Aave is Ethereum’s dominant Defi Lending Protocol, with a total value of over $43 billion (TVL). Gho is Aave’s native overmaterialized Stablecoin and currently has a $249 million circular supply.
According to blockchain analytics company Token Terminal, active lending and GHO issuance are key metrics that directly correlate with Aave DAO’s revenue-generating ability.
Ethereum Foundation improvements
Meanwhile, the loan move follows EF’s recent efforts to restructure its financial strategy after extending community complaints.
Earlier this year, the foundation deployed 50,000 ETHs across multiple debt platforms. This included a February deposit of 30,800 ETH in Aave, split between the core market and Aave Prime. Additional allocations included 10,000 ETH in Spark at Makerdao and 4,200 ETH in Compounds.
Borrowing reflects a strategic shift from ETH liquidation to financial operations. Instead, EF is now leveraging Defi Lending to maintain its holdings while generating yields.
The approach also distracts foundation from criticisms faced in January and those selling nearly $1 million worth of 300 ETH.