- No EF Involvement: The $56M ETH transfer to Sky was linked to an early investor, not the Ethereum Foundation.
- Liquidation Prevention: The wallet moved funds to Sky to lower its liquidation price amid ETH’s 15% drop.
- EF’s DeFi Shift: The Ethereum Foundation allocated 45,000 ETH to DeFi platforms like Aave, Spark, and Compound.
Members of the Ethereum community refuted speculation regarding a $56 million transfer to the lending protocol Sky from the Ethereum Foundation. An Ethereum developer dismissed rumors that the Ethereum Foundation (EF) was responsible for a recent deposit exceeding 30,000 Ether into the decentralized finance (DeFi) protocol Sky, previously known as MakerDAO.
Large Ether Transfer Sparks Speculation
On March 10, a wallet address transferred 30,098 Ether valued at approximately $56 million, into Sky. The crypto intelligence platform Arkham identified the address as “Ethereum Foundation?,” prompting speculation that the EF might have transferred funds into the lending protocol — a tactic suggested by the community — rather than directly liquidating ETH to support its operations.
Nevertheless, community members promptly refuted the allegations, asserting that the wallet in dispute does not belong to the Ethereum Foundation. As per Eric Conner, co-author of the Ethereum Improvement Proposal (EIP-1559), a Wu Blockchain report is “completely inaccurate,” suggesting that the address has no connection to the EF
Anthony Sassano, the host of The Daily Gwei, referenced the report as well, stating that the wallet is not owned by the EF. Wu Blockchain later specified that although the account was thought to be linked to the Ethereum Foundation, its transaction history indicated it was probably tied to an early Ethereum investor.
Wallet Transaction History and ETH Price Movement
The address obtained a 4 million Dai transfer from the EF ETH Sale in May 2022, and the original ETH funding was linked to a wallet named jonny.eth. The address transferred $56 million to the Sky vault to prevent liquidation as ETH prices fell. On March 10, ETH fell from a peak of $2,138 to $1,813, marking a 15% decrease. The action enabled the wallet to evade liquidation, reducing its liquidation price to $1,127.14, which is 40.19% lower than ETH’s price of $1,896 at the moment of writing.
Although the latest deposit into Sky was not associated with the Ethereum Foundation, the EF has previously encountered criticism for converting ETH into stablecoins to support team salaries and operational expenses. In January, community members proposed that the foundation might opt to borrow stablecoins using its ETH holdings instead of selling the assets.
Ethereum Foundation’s Shift Toward DeFi
At that moment, Sassano suggested that rather than exchanging ETH for stablecoins, the foundation ought to explore borrowing stablecoins against ETH through Aave. Sky enables users to perform a related action. Users can borrow DAI by depositing ETH.
On February 13, the EF responded to the community’s input and allocated 45,000 ETH, roughly $120 million then, to DeFi platforms Aave, Spark, and Compound. Community members rejoiced at the decision, with Aave’s founder and CEO Stani Kulechov stating, “DeFi will prevail.” The EF also mentioned that there’s “more to come,” indicating that this won’t be their final venture into DeFi.
