The community rejoices as the Ethereum Foundation donates $120 million to DeFi apps.

In response to community concerns regarding the Ethereum Foundation's reliance on ETH sell-offs for funding, the foundation donated $120 million of Ether to decentralised finance (DeFi) protocols.

The Ethereum Foundation's multisignature address deposited 30,800 ETH into Aave, 10,000 ETH into Spark, and 4,200 ETHUSD into Compound on February 13. The total value of the 45,000 ETH deployed was around $120.4 million, given that ETH was trading at about $2,600.

The Ethereum Foundation's "biggest allocation in DeFi" is the 30,800 ETH (about $82.4 million) invested in Aave Prime and Aave Core, according to Aave founder and CEO Stani Kulechov. Additionally, Kulechov expressed hope when the foundation provided financing to Aave, saying, "DeFi will win."

Many members of the community, besides Kulechov, applauded the action since it would lessen the necessity for the foundation to sell Ethereum in order to raise money for expenses.

The Ethereum Foundation's $120 million deployment is celebrated by the community.

Mark Jeffrey, a podcaster, called the deal "smart," stating that Aave is the "beating heart of lending" and lending is the "beating heart of DeFi."

The community was encouraged by an X user who viewed the development as a victory and told them to "keep it up" because what they were doing was effective. Another user, meanwhile, stated that if the Ethereum Foundation kept using their money in this way, it would be "a positive thing."

The pseudonymous co-founder of the lending protocol HyperLend, 0xNessus, claimed it was absurd that the foundation had only recently begun interacting with DeFi apps after a long period of time. "We only needed to intimidate them," the executive wrote on X.

The sale of ETH by the Ethereum Foundation has drawn criticism.

The Ethereum Foundation came under fire in January for using ETH sales to pay its employees and fund running costs.

Eric Conner, a co-author of the Ethereum Improvement Proposal (EIP-1559), stated that "dumping ETH" was the foundation's top use case. Instead of selling their cryptocurrency assets directly, which many believe will hurt its price, Anthony Sassano, host of The Daily Gwei, proposed using Aave to stake and borrow capital against their ETH.

Concerns over the foundation staking its ETH were previously addressed by Vitalik Buterin, who brought up regulatory ambiguity and the risk for being pressured into taking a position on prospective Ethereum hard forks.

However, the Ethereum Foundation stated in a post that there will be "more to come," suggesting that this may not be the final capital deployment. The group also mentioned that it is already investigating staking and soliciting recommendations from the community.

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