The Ethereum Foundation has announced the adoption of a new treasury management policy aimed at ensuring the long-term financial sustainability of the project.
Ethereum's New Treasury Policy
The Ethereum Foundation has introduced a new treasury policy that includes a 2.5-year operating expense reserve. This allows Ethereum to continue functioning even in the event of unexpected downturns in the crypto market. Additionally, an annual spending cap of 15% of total treasury assets has been established, with an aim to reduce this cap to 5% over the next five years.
Internal Reporting System
An important aspect of the new policy is the implementation of a structured internal reporting system. The finance team will provide quarterly and annual financial updates to both the Board and management. This enhances transparency and ensures responsible handling of treasury funds.
Implications for the Community
The new treasury policy addresses criticisms aimed at crypto projects regarding poor financial planning and lack of transparency. With a robust financial plan and regular reporting, the Foundation sets a new industry standard, increasing the community's confidence in Ethereum's long-term development.
The introduction of the new treasury management policy demonstrates that the Ethereum Foundation is prepared to plan its financial future prudently, which is crucial in times of market instability.
