The recent sale of 100 ETH for 291.267K DAI through CoW Protocol has made users question the security and transparency of the Ethereum network.
A suspected Ethereum Foundation address has made headlines after reportedly selling 100 ETH for 291.267k DAI through CoW Protol, a permissionless trading protocol that leverages Batch Auctions to find prices.
The Ethereum Foundation, known for its significant role and contributions to Ethereum’s development, focuses on enhancing the ecosystem through various projects. However, the recent ETH sale from a suspected foundation address has raised concerns about the transparency of the foundation’s operation.
According to reports, the suspected Ethereum address transferred these DAI to another address and continued to sell ETH for DAI via CoW Protocol.
CoW Protocol Party Called “Solver.”
Furthermore, CoW Protocol operates through a party called “a solver,” which is tasked with offering settlement solutions for batch auctions. Solvers compete with each other to present the most effective batch settlement solution. Successful submissions earn tokens as rewards.
The protocol offers numerous benefits, including introducing a new trading method and functioning as a Meta DEX aggregator. It also ensures optimal price by selecting the most liquid venue for trades in a batch, offering a superior price across aggregators or Automated Market Makers (AMMs).
Users on the X platform speculated that the sale could be part of routine asset management strategies, while others believe there are more motives behind the move.
Some analysts argue that reducing the foundation’s ETH reserves could reduce market liquidity and decrease prices. In contrast, others see it as a strategic move to diversify assets and manage risk.
Ethereum Foundation Holdings.
Meanwhile, on March 31, 2022, the Ethereum Foundation held over $1.6 billion in Ether and $300 million in non-crypto investments, which represents 99.1% of the organization’s investment in digital assets. The report stated that the holdings included 39,168 ether already allocated to client teams developing on Ethereum.
According to a March 21 report, the U.S. Securities and Exchange Commission (SEC) is investigating Ethereum following a 2022 software update known as Merge, which significantly changed transaction ordering on the network. The Merge allowed users to stake their Ether to earn interest. The SEC is concerned whether it is a security.