Ethereum Goes Defipunk
Olivia Capozzalo & Camila Russo
June 05, 2025
gm Defiers!
Today’s big story:
- The Ethereum Foundation reveals its new treasury policy — and finally embraces DeFi
Plus:
- Circle debuted today on the NYSE — is it a top signal like Coinbase in 2021?
- DEX PancakeSwap sees record monthly volumes
- JPMorgan plans to offer financing against crypto ETFs, reports say
- Magic Eden commands over 3.5% of Solana mindshare after TRUMP wallet news
- DNA fund CEO Chris Miglino details shift from ETH & Tether to a $50M bet on decentralized AI [MEDIA PARTNERSHIP]
- Andrew McFarlane of Validation Cloud shares how they’re building the backbone of web3 [MEDIA PARTNERSHIP]
Read more below! But first, please give our sponsors some love; they make this newsletter possible.
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The EF’s ‘Defipunk’ Push Is a Sign the Tide Is Turning
While the Ethereum blockchain is open and transparent, the Ethereum Foundation has been pretty opaque. But it’s taking some steps to change that — the latest one being its freshly published treasury policy.
It’s the first time we’ve seen a clear roadmap for handling the roughly $600 million in its coffers (most of which is in ETH). Also important, the document was a loud signal that DeFi is finally stepping out of the sidelines and into the EF’s spotlight.
Let’s start with the treasury management policy. The new framework replaces what seemed like opportunistic ETH sales to cover operations, with strict guardrails. Under a two-variable formula, annual operating expenses are capped at a target 15% of the total treasury, and the Foundation must always hold a 2.5-year runway in reserve.
In practice, that means:
- A = 15% of treasury goes to cover yearly budgets (salaries, grants, research, etc.).
- B = 2.5 years of operating expenses must be in the “bank” before any ETH is sold.
Multiply A×B, and you get your fiat-denominated cushion; whatever’s left can stay in ETH, be staked, or be deployed into carefully vetted DeFi protocols. There’s no more “sell near ETH market tops.” Instead, the plan is to implement counter-cyclical sales if fiat reserves dip beneath that A×B threshold.
This all seems reasonable. But the real head-turner here is how much ink this policy devotes to supporting DeFi.
For too long, EF leadership shied away from openly championing decentralized finance. For most Ethereum conferences and summits, you would struggle to find DeFi in the agenda — it was at most relegated to some side stage or track.
Vitalik famously referred to DeFi as an “Ouroboros” — a snake eating his own tail; as in, protocols were generating yield in an unsustainable way. EF communications rarely highlighted Uniswap, Aave, or Maker as pillars of the ecosystem, and so on — the examples are many.
That reticence always felt odd, because DeFi is the single biggest value driver on Ethereum. By April 2025, Ethereum had over $156 billion in total value locked — more than 60% of TVL across all chains.
After Circle and Tether (centralized stablecoin issuers, which you could argue are still part of the DeFi ecosystem), it’s DeFi protocols Sky, Aave, Uniswap, and Lido that are generating the most revenue on Ethereum, according to DeFiLlama.
It’s undeniable that DeFi is Ethereum’s most successful use case and the heart of not just Ethereum’s economy, but the entire blockchain ecosystem. Ignoring that is like Inter ignoring Messi; Like the Louvre hiding the Mona Lisa. Makes no sense.
Which is why it’s so significant that the EF’s new treasury policy doesn’t just mention DeFi in passing. It codifies a new term — “Defipunk” — to describe projects and users that embody DeFi’s original ethos: permissionless, trustless, non-custodial, and, now, with a renewed emphasis on privacy.
The EF is seeking to ensure that protocols aren’t just decentralized in name but in practice. No more “decentralization theater.” The focus is back to trustless smart contracts, self-custody as a baseline, and on-chain privacy.
Sure, locking more ETH into staking and DeFi means fewer dumps — always bullish. But the bigger win is the Foundation’s role shift: it’s no longer a passive grant-maker that quietly funds academic research. It’s now a proactive ecosystem steward pledging cold hard cash/ETH to DeFi projects that meet Defipunk criteria.
Grants, research support, and maybe even on-chain collateral allocations. That means that next-gen AMMs, censorship-resistant lending protocols, and privacy layers could get meaningful support from one of blockchain’s most powerful entities.
In short, the tide is turning. Ethereum’s governance body is finally admitting that DeFi isn’t a risky sideshow — it’s the platform’s beating heart. And if this treasury policy is anything to go by, the EF isn’t just talking: it’s ready to put its ETH where its mouth is.
With love,
Cami, founder of The Defiant
📈 Markets in the last 24 hrs:
| TICKER | VALUE | 24H | |
|---|---|---|---|
 | Bitcoin | $104,716 | -0.70 % |
 | Ethereum | $2,595.93 | -2.25 % |
 | XRP | $2.2 | -2.54 % |
 | BNB | $659.67 | -1.43 % |
 | Solana | $150.92 | -4.20 % |
 MessariPortals | MINDSHARE Rank | MINDSHARE % Change (7d) |
|---|---|---|
Solana SOL | 6  | 41.55% |
Avalanche AVAX | 20 | 28.95% |
TRON TRX | 8  | -19.81% |
| Powered by Messari Portals | ||
This is the news that mattered in the past 24 hrs:
- As Circle's highly-anticipated IPO debuts today, we asked analysts what it could mean for crypto markets in the near-term; Back in 2021, Coinbase’s pioneering move to go public arguably marked the top of the bull run.
- BNB Chain-based DEX PancakeSwap had a record-breaking May in terms of monthly trading volumes. The DEX also recently revealed a partnership with the Trump family’s crypto project, World Liberty Financial.
- Banking giant JPMorgan plans to let clients use crypto ETFs as collateral for loans, starting with BlackRock’s Bitcoin ETF, sources told Bloomberg. The move would be a significant step in TradFi adoption of crypto.
- After NFT marketplace Magic Eden confirmed reports that it is partnering with the team behind President Donald Trump’s official memecoin to launch a crypto wallet, attention around the platform spiked; Currently, Magic Eden takes up 3.8% of all mindshare across Solana, according to Messari Portals* data.
*Messari Portals are a free-to-use community resource that combines quantitative data with qualitative context, giving crypto communities transparent, convenient access to information that helps them make better decisions. Visit https://messari.io/portals to learn more.
🎬WATCH
In the latest episode of The Defiant Podcast, we spoke with Rob Viglione, co-founder and CEO of Horizen Labs, to explore the groundbreaking potential of zero knowledge proofs.
From balancing transparency and on-chain privacy to the intersection of AI and web3, Rob dives into the critical role of cryptography in reshaping how we share and protect data.
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