Ethereum Foundation set a 15% annual spending target and 2.5-year buffer

The Ethereum Foundation published a treasury policy on June 4, 2025 that set current annual operating expenses at 15% of its total treasury and targeted a reserve covering 2.5 years of operations. It also said operating expenses should decline roughly linearly over five years toward a long-term baseline of 5% of the treasury.

The development mattered because it replaced an opaque question—when and why an Ethereum-linked institution might sell ETH—with a documented framework connecting spending, fiat reserves and asset deployment. The policy did not schedule a specific sale or guarantee that its targets would remain unchanged. The foundation’s board and management retained authority to reevaluate them as market conditions and organizational priorities changed.

A formula for reserves and ETH sales

The policy defined two variables: annual operating expenses as a percentage of the current treasury, and the number of years of operating expenses held in reserve. Multiplying those variables determines the target for fiat-denominated reserves, whether held offchain or through onchain instruments. The remainder informs how much value stays in core ETH holdings.

Under the June 4 targets, the foundation would compare its fiat-denominated assets with the 2.5-year operating buffer and periodically decide how much ETH, if any, should be sold during the following three months. It said sales would generally use fiat off-ramps or onchain swaps into fiat-denominated assets.

These were allocation rules rather than transaction disclosures. The policy did not report a June 4 treasury balance, identify an execution venue, state a planned ETH quantity or establish a minimum sale price. It therefore cannot support a calculation of prospective market supply or price impact.

The latest earlier balance sheet available in the foundation’s 2024 report measured its treasury on October 31, 2024 at approximately $970.2 million: $788.7 million in crypto assets and $181.5 million in non-crypto investments and assets. That seven-month-old snapshot provided scale but was not a June 4, 2025 valuation, and applying the new percentages directly to it would not establish the foundation’s event-day budget or reserves.

Moving beyond passive ETH holdings

The policy also formalized a more active onchain strategy. It identified solo staking and supplying wrapped ether to established lending protocols as existing approaches. It allowed stablecoin borrowing, higher-yield onchain strategies and, as decentralized finance matured, carefully vetted farms and tokenized real-world assets.

The foundation said it would favor audited, permissionless and established protocols; prioritize liquidity and conservative risk; and assess smart-contract, governance, custody, oracle and stablecoin de-peg risks. It also said withdrawals could reflect diversification or changing opportunities rather than rejection of a protocol.

That language established selection principles, not evidence that a particular protocol had passed review. No allocation size, wallet address, counterparty, yield, benchmark return or realized gain appeared in the June 4 policy. References to future farms and tokenized assets were plans, not completed deployments.

Transparency had public and private limits

The finance team was directed to prepare quarterly reports for the board and management covering performance, benchmarks, positions and notable operational events. The annual public foundation report was expected to summarize major treasury allocations, including percentages held in fiat, idle ETH and deployed ETH.

Quarterly reporting was therefore an internal governance commitment; the policy did not promise that every quarterly report, position or transaction would be published. The annual disclosure remained the stated public reporting mechanism.

The verified June 4 development was institutional rather than a protocol change: an organization that funds Ethereum research and ecosystem work documented how spending needs, ETH sales and onchain deployment should interact. The policy did not alter Ethereum’s consensus rules, obligate network participants or demonstrate a market reaction. Any assessment of implementation required later transaction records and financial reports.