Ethereum Foundation sells again on Cow Protocol

The Ethereum Foundation moved another 100 Ethereum (ETH), using the decentralized Cow Swap Protocol. The Foundation has been known to support its annual budget with ETH sales and liquidations. 

The Ethereum Foundation used the Cow Protocol router in its latest transaction to sell 100 ETH. The relatively small sale follows a series of divestments, which aim to keep a fiat budget for the foundation’s plans. 

Ethereum Foundation’s history of ETH sales 

The latest transaction went through Cow Protocol, a decentralized service for MEV bot protection and discovering the best route to swap funds. The Foundation received 241.2K DAI after a Cow Protocol settlement transaction. The latest sale is part of the usual trend of selling smaller amounts of ETH through decentralized protocols. 

While selling from the foundation is expected, in the past few weeks, it was also a sign of a local market top. Historically, the foundation has also sold during depressed market periods, including at prices of $600 in 2020 . The foundation also sold all the way up to ETH’s all-time high in 2021, when prices peaked above $4,700.

Only two weeks ago, the foundation moved 35K ETH to Kraken during a period of market turbulence. Previously, the organization had liquidated ETH at the market top in March 2024. The August 23 transfer was also considered the largest sale attempt for the year.

The foundation still holds 382.46K ETH, now surpassing Grayscale which has divested to 261K coins. The Ethereum Foundation is not considered a source of selling pressure, but its actions often undermine confidence in the price of ETH. After the sale, ETH hovered lower than its usual range, sinking to $2,395.45. 

After the sale, overall activity on Ethereum also increased. Gas price immediately reflected the change, rising to 3.5 gWei, after a period when it slid below 1 gWei for days.

Vitalik Buterin moves STRK holdings

In another high-profile transaction, Ethereum’s co-founder Vitalik Buterin moved an earlier airdrop of Starknet (STRK) tokens. 

More than 2M STRK tokens moved to a brand-new address , after interacting with one of Buterin’s known wallets. The STRK tokens, valued at $838.8K, are part of early allocations to VC backers. 

Buterin was one of the earlier investors in the seed round of Starknet (STRK), raising a total of $6M along with Pantera Capital, Polychain Capital, Naval Ravikant, and others. 

So far, STRK has traded with the usual pattern of a VC-backed token, sliding since its launch in March 2024. STRK briefly traded above $2.40, only to slide to the current level of $0.40. Starknet is one of the smaller L2 projects that has failed to gain significant traction. After initial traffic got a boost from incentives, Starknet produces almost no fees in comparison to other chains.

Starknet is not a neglected chain, having received as much as $1B in value inflows from Ethereum. Of those inflows, around $250M are in the form of stablecoins, with the rest in the form of wrapped tokens. However, the platform’s protocols and apps lock in only $238M in value, based on Defi Llama data.

One criticism of Ethereum is that the project helped create scalable L2 solutions, which are not paying back to the main chain. While some apps achieve peak fees, most L2 use the mainnet for free, or at a very low cost. 

L2 transactions still only take up 2% of Ethereum block space, not enough to create competition and require higher prices. Yet even with a lowered market price, the staked ETH is still a good way to secure the network, due to the significant barrier to entry.

Ethereum Foundation spends on internal team, grants programs

The Ethereum Foundation has been transparent about its spending efforts. Internal spending translates into teams dealing with Solidity issues, cryptography, the Robust Incentives group, the Devcon project, Ethereum.org, and onboarding. 

External spending is on a series of grants and virtual and live events. The foundation also supports local communities and organizes hackathons worldwide. 

In Q2, the Ethereum Foundation awarded more than $8M to small-scale projects showing promise.

So far, the foundation has not spoken of supporting the ETH price or even the coin’s reputation, sharing Buterin’s focus on product creation. However, the foundation has made use of stablecoins for its gains, disclosing that some of the teams also require fiat payments.

Cryptopolitan reporting by Hristina Vasileva