Ethereum Foundation expands non-crypto assets in reserves to 19%

The Ethereum Foundation, which oversees and funds development of the Ethereum network, has revealed its total holdings, which include a fifth in non-crypto assets, an amount it says is intended to provide “greater safety margin” to protect its assets from a downturn in the crypto market.

The Ethereum Foundation (EF) has released a report detailing that its $1.6 billion fund is primarily made up of Ether (ETH), but includes a surprising 18.8% in non-crypto assets.

Overall, the EF nonprofit, which manages funds for Ethereum development, holds about 0.3% of the current total ETH supply, or about $1.3 billion, as verifiable on Etherscan. However, its non-cryptocurrency holdings make up a sizeable chunk of the pie, at $302 million.

The April 2022 report is the first report released by the foundation, outlining the exact composition of its asset portfolio and how it allocates spending, including grant funding for various Ethereum-based projects. Overall, the EF appears to be on very strong financial footing, having spent just $48 million in 2021.

The report states that the foundation has increased its non-cryptocurrency holdings to $302 million from a previously undisclosed amount. The amount is intended to provide a “greater margin of safety” in an effort to protect its assets from a downturn in the crypto market.

The foundation did not immediately respond to a request for details on those non-cryptocurrency holdings. However, Ethereum researcher Justin Drake suggested in a tweet on Monday that these non-cryptocurrency holdings are simply fiat reserves.

The Foundation spent $21.8 million on layer 1 (L1) research and development, the largest portion of its spending last year. This total does not include the Customer Incentive Program (CIP), an ongoing program that rewards nine specific node operators on a fixed schedule with a share of 39,168 ETH, worth $132 million as of this writing.

It also spent $9.7 million on community development, $5.9 million on ethereum as a developer platform, $5.1 million on international operations, $3.6 million on zero-knowledge (zk) research and development, and $1.9 million on layer-two (L2) research and development.

The foundation’s financial report comes months ahead of a planned merger in which the Ethereum mainnet will transition to a proof-of-stake (PoS) consensus algorithm, which is expected to significantly reduce the network’s energy requirements and carbon footprint.