The Ethereum Foundation has begun unwinding part of its staking position shortly after approaching its self-imposed goal of 70,000 staked ETH.
On Saturday, the Ethereum Foundation unstaked 17,035.326 ETH, valued at approximately $40 million, according to on-chain data from Arkham. The move involved depositing wrapped staked ETH (wstETH) into Lido's unstETH contract, with the underlying ETH expected to be returned once the withdrawal queue is processed.
In the Ethereum network, unstaking refers to the process of withdrawing ETH that was previously locked to help secure the blockchain through validators. When ETH is staked, it is deposited into the Ethereum Beacon Chain, where it remains locked while accruing rewards. To unstake, a withdrawal request must be initiated, after which the funds enter a queue before being released.
The Ethereum Foundation has not publicly explained the reason for withdrawing 17,000 ETH, prompting speculation among community members that it may be preparing to sell the assets.
"The biggest seller of ETH continues to be the people who created ETH," one user wrote in response to the news.
Ethereum Foundation Nears 70K Staked ETH Goal
The foundation began staking ETH following a policy update in June 2025. At the time, it stated that participation in staking and decentralized finance would help fund protocol research, development, and ecosystem grants.
Since February, the foundation steadily expanded its staking position — starting with an initial 2,016 ETH, followed by 22,517 ETH in March. Earlier this month, it staked more than 45,000 ETH across a series of transactions, bringing its total to approximately 69,500 ETH, just below its internal 70,000 ETH target.
Despite the progress, governance concerns persist. Ethereum co-founder Vitalik Buterin has previously cautioned that large-scale staking by the foundation could undermine its neutrality during contentious hard forks, where competing chains might emerge.
DeFi Protocols Unite to Back rsETH
Separately, a coordinated response is underway in the DeFi sector following an incident in which hackers stole over 116,000 restaked ETH tokens and used them as collateral to borrow funds, leaving roughly $195 million in bad debt on Aave and straining the broader DeFi lending market.
Backers have pledged more than 43,500 ETH — approximately $101 million — in a coordinated effort dubbed "DeFi United," led by Aave, with participation from Lido DAO, Golem Foundation, EtherFi Foundation, and Mantle.
Timeline
February 2025: Ethereum Foundation makes its initial stake of 2,016 ETH.
March 2025: Foundation stakes an additional 22,517 ETH, steadily expanding its position.
June 2025: Foundation formally updates its policy to allow staking and DeFi participation to help fund research, development, and ecosystem grants.
July 2025 (earlier this month): Foundation stakes more than 45,000 ETH across a series of transactions, bringing its total to approximately 69,500 ETH — just below its 70,000 ETH internal target.
Saturday (recent): Foundation unstakes 17,035.326 ETH (~$40 million) via Lido's unstETH contract without publicly disclosing a reason.
Fast facts
Amount unstaked: 17,035.326 ETH (~$40 million)
Mechanism: wstETH deposited into Lido's unstETH contract; ETH returned after withdrawal queue
Staking activity start: February 2025 (initial stake); formal policy update announced June 2025
Foundation's staking target: 70,000 ETH (internal goal)
Total staked before unstaking: ~69,500 ETH
DeFi United pledge: 43,500+ ETH (~$101 million) to address ~$195 million in bad debt on Aave
Why it matters
Because the Ethereum Foundation has not disclosed a reason for the withdrawal, it has prompted community speculation about whether the ETH may be sold — a question that carries weight given the foundation's prominence as a long-term holder.
Vitalik Buterin's previously stated concern — that large foundation staking positions could compromise neutrality during contentious hard forks — gains renewed relevance as the foundation approaches, then partially retreats from, its 70,000 ETH target.
The simultaneous DeFi United response to the rsETH hack illustrates how a single collateral incident can generate systemic bad debt across major lending protocols, requiring coordinated multi-party intervention rather than a single-protocol fix.
