Lisk Foundation to Exchange 1,000 Bitcoin for Ethereum Over 10 Weeks
• The Lisk Foundation announced that it will convert 1,000 BTC to Ethereum (ETH) over 10 weeks.
• 500 BTC will be held in reserve and the ETH purchased will be deposited into a 2-of-3 multisig account.
• The move is intended to bolster the foundation’s long-term treasury, as well as benefit from Ethereum’s staking mechanism.
Lisk Foundation To Convert 1,000 Bitcoin (BTC) To Ethereum (ETH)
The Lisk Foundation, led by co-founder and CEO Max Kordek, announced plans to convert 1,000 bitcoin (BTC) to ethereum (ETH) over the next 10 weeks. 500 BTC will also be held in reserve for expenses in 2024 and 2025. The ETH purchased will be deposited into a 2-of-3 multisig account with each board member of the Lisk Foundation holding one key. This move is intended to bolster the foundation’s long-term treasury and benefit from Ethereum’s staking mechanism.
Objectives of Converting BTC To ETH
The decision is aimed at minimizing risks associated with third parties while supporting decentralized applications (dapps). Additionally, Ethereum’s staking mechanism may provide a sustainable, long-term return on investment (ROI). According to Kordek there are three main reasons behind this decision: Firstly, Ethereum being the largest smart contracting platform in the world aligns with their treasury goals; secondly ETH has acceptable risks from a treasury perspective; lastly investing in an appreciating asset such as ETH which generates yields is beneficial for the foundation’s future.
Impact on Bitcoin Prices
Lisk become notable during its Initial Coin Offering (ICO) phenomenon between 2016 – 2017 raising 14,000 BTC. Its native currency LSK has a market cap of $106m ranking 195th according to CoinMarketCap. Despite bitcoin’s price recovery in April this year it experienced another dip due to Lisk’s announcement of converting 1000 BTC into ETH over two and half months starting May 11th 2023 .
Holding Onto 500 BTC
Kordek clarified that the intention is not only to stake acquired ETH but also retain 500 BTC for covering expenses 2024 and 2025 as part of its long term treasury management strategy . The 1000 BTC are being sold in chunks of 100 every week reduce risks associated with third parties transactions while optimization strategies such as holding onto 500BTC allows more control over operations until halving event occurs 2024 .
Conclusion
In conclusion ,the move by Lisk Foundation emphasizes importance of investing in an appreciating asset which generates yields as opposed engaging other non – related activities . It also provides insight how large cryptocurrency organizations or companies can minimize risks associated when dealing with digital assets .
