- The Ethereum Foundation has continued its pattern of selling ETH this year, recently converting 100 ETH into DAI on December 10, 2024.
- The Ethereum Foundation periodically sells ETH to finance public projects and maintain its reserves, and its recent offload comes at a time when the anticipated Pectra upgrade is approaching its launch.
The Ethereum Foundation, a non-profit organization dedicated to supporting the Ethereum network, has continued its trend of selling ETH this year. In a recent transaction, the Foundation sold 100 ETH at a price of $3,743 each, totaling approximately $374,300 in DAI. This latest sale coincided with a crypto market correction that saw ETH drop below $3,800, highlighting the Foundation’s strategic timing in navigating the fluctuations of the market.
While the timing of these sales may raise eyebrows, they often indicate preparations for significant developments. The decision to convert ETH into DAI can be understood through various perspectives. Recently, the cryptocurrency market has experienced notable volatility, prompting organizations like the Ethereum Foundation to secure their assets in a stablecoin that maintains its peg to the US dollar. DAI, being a decentralized stablecoin, allows the Foundation to protect its value during market downturns while retaining liquidity.
Aya Miyaguchi, the executive director of the Ethereum Foundation, has previously discussed the foundation’s annual budget of approximately $100 million, which is allocated for operational costs, grants, and salaries expenses that frequently necessitate the use of fiat currency. To effectively address these financial requirements, the Foundation has adopted this strategic approach by converting a portion of its ETH holdings into stablecoins like DAI.
Here’s What You Need to Know About the Pectra Upgrade
This move comes just ahead of the highly anticipated Pectra upgrade, which is expected to significantly enhance the Ethereum network’s capabilities. As we’ve stated in previous reports, the upgrade is scheduled for launch between late 2024 and Q1 2025. The Prague/Electra aims to incorporate sharding technology and Layer-2 solutions, such as rollups, to improve scalability.
Furthermore, the upgrade will enhance security and stability through advanced cryptographic methods and improvements to the Proof of Stake (PoS) protocol. The Pectra upgrade is based on four Ethereum Improvement Proposals (EIPs). Firstly, EIP-7251 aims to increase the maximum effective balance for validators, allowing them to control larger stakes without the need to operate multiple validators. Secondly, EIP-4788 will streamline the withdrawal process for staked ETH, potentially making staking more attractive to a wider audience. Lastly, EIP-7702 is designed to improve the user experience for wallets.
The potential impact of the Pectra upgrade on ETH prices remains to be seen. At the time of writing, Ethereum (ETH) is trading at $3699, having decreased by 1.23% in the past day and 0.69% over the past week.
