Ethereum News: Ethereum Foundation turns to Morpho for DeFi yields

Ethereum Foundation has deposited 2,400 ETH worth around $9.6 million and $6 million in stablecoins into DeFi protocol Morpho. It is the latest example of the Ethereum Foundation farming DeFi yields.

According to the Ethereum News, it decided to allocate funds to Morpho yield-bearing vaults as part of its Cypherpunk goals.

Ethereum Foundation Praises Morpho Open Source Ideals

In the announcement, the Ethereum Foundation described Morpho as a pioneer in permissionless DeFi. It further added that the protocol has demonstrated a consistent commitment to open-source standards.

The Foundation wrote:

It added that Morpho registered some of its top products, including MetaMorpho & Morpho Vault v2, as well as Morpho Blue (v1), under FLOSS licenses. This means anyone can fork and build on its protocol.

The open source ideals align with Ethereum Foundation policies, which include supporting decentralized cypherpunk applications. Part of the way it supports such projects is through capital deployments to help build what it described as Defipunk.

The Morpho protocol meets the Ethereum Foundation’s Defi Punk criteria. These include permissionless access, self-custody, and FLOSS-licensed technology. Other factors, such as privacy, an open development process, distributed UIs, and maximally trustless core logic, are also considered.

Ethereum News: Ethereum Foundation Allocated Over $130 Million to DeFi in 2025

The deployment of over $16 million to Morpho Protocol continues the Ethereum Foundation’s DeFi yield efforts. The organisation responsible for supporting the Ethereum ecosystem has allocated more than $130 million to DeFi this year.

Its first allocation this year was in February when it sent around $120 million worth of ETH to lending platforms. Aave got 30,890 ETH at the time, while Spark and Compound received 10,000 ETH and 4,200 ETH, respectively.

The foundation further borrowed $2 million in GHO stablecoin on the Aave protocol in May. All these moves are part of its effort to reduce the selling of its ETH treasury after criticism from the community.

However, the foundation is still selling some of its ETH stash to fund its efforts. Earlier this month, it announced swapping 1000 ETH on CoWSwap to stablecoins to fund R&D, donations, and grants. Before that, there was a conversion of 10,000 ETH to stablecoins on centralized exchanges.

While these sell-offs have been spent on funding research, developments, donations, and grants, they have also attracted criticism.

On one hand, some believe the Foundation should stop selling ETH and use DeFi yields to fund its activities. However, others criticize the sell-offs on exchanges, noting that the foundation should sell to ETH treasury companies.

ETH Slips Below $4,000 as Crypto Market Continues Struggles

Meanwhile, ETH is down more than 3% today and has returned to below $4,000 as it continues its volatile price movements. Its decline tracks with the rest of the crypto market, which has lost more than 2% of its market cap today.

With the recent drop, ETH has now lost more than 11% of its value in the past seven days. Despite this decline, Ethereum activity remains high. The network recorded its highest daily transactions per second ever on October 14 with 312.86 tps.

The sentiment surrounding the token is also positive. Crypto newsletter Milkroad noted a strong correlation between the expansion of global M2 supply and the price of ETH.

It said:

However, technical analyst Ali Martinez believes that Ether must maintain its support at $3,900 for a rebound to occur. According to him, the asset could go as high as $5,000 or even higher if the major support level holds.