The Ethereum Foundation (EF) has taken bold steps to venture more profoundly in its decentralized finance ecosystem with its growing involvement in on-chain privacy and lending, in recent news.
In at least two separate actions this week, it became a major validator in Railgun’s privacy project. The Foundation also borrowed $2 million in GHO stablecoins from Aave.
These decisions show the Foundation’s more profound role in managing its treasury through decentralized platforms rather than relying on traditional financial tools.
EF Stakes in Railgun
A recent Ethereum news update on X revealed that EF staked 50,000 RAIL tokens on May 28.
As revealed, this single transaction is worth around $48,932. Notably, this made the Foundation one of the largest validators in the Railgun project.
Image Source: Railgun on X
Railgun is known for using zero-knowledge cryptography to allow private transactions on Ethereum. It also has an interchain linkup with networks such as Arbitrum and Polygon.
By staking this amount, the Foundation now holds voting rights in Railgun’s DAO, where each RAIL token represents one vote.
According to expert opinions, this move gives the Foundation a direct say in governance decisions. Again, this includes upgrade acceptance and how rewards are shared.
While this adds credibility to the Railgun project, it raises concerns about power concentration on Ethereum
A stake of this size allows the Ethereum Foundation to influence outcomes in a DAO that is meant to represent a broad community.
Some critics question whether this changes the balance of influence and how decentralized the project remains.
The decision also signals the Foundation’s broader strategy. With growing global attention on privacy in crypto, the EF is supporting projects that protect user information while staying on-chain.
Its involvement in Railgun may encourage other developers and investors to back privacy-enhancing tools.
Ethereum News: Aave Founder Describes Borrowing Move as Full DeFi Circle
In yet another Ethereum news update, via an X post, Stani Kulechov, the founder of Aave, shared that the EF had borrowed $2 million in GHO stablecoins using its ETH as collateral.
Image Source: Stani Kulechov on X
GHO is Aave’s decentralized stablecoin, pegged to the US dollar and backed by overcollateralized assets.
It is worth noting that Interest paid on GHO loans goes to the Aave DAO treasury. This borrowing follows earlier criticism from within the Ethereum community.
It is essential to mention that some figures pushed the Foundation to explore borrowing rather than selling its ETH reserves.
Kulechov called the move a “full DeFi circle” because the Ethereum Foundation is both a lender and a borrower on Aave.
It lends ETH and now borrows GHO, showing a shift in how it manages its assets.
Significant Developments
As of now, one of the most significant Ethereum Foundation milestones was the launch of Pectra Upgrade .
The update brought about significant development that strengthened the network operations.
Likewise, this recent development is not the Foundation’s first significant step into DeFi.
In February 2025, it allocated 45,000 ETH, worth around $120 million, to platforms such as Aave and Compound.
That move marked a clear break from past approaches, where ETH was mainly held without much active use.
By moving deeper into DeFi, the Foundation is showing how it can support the ecosystem while also managing its resources in a modern way.
These latest Ethereum news updates, highlighted how the Ethereum Foundation is becoming more active in the projects built on its network.
