How DAOs should approach treasury management on Bankless

Currently, even some of the largest protocols are unable to generate enough revenue to cover operational expenses (audits, salaries/payments to contributors, marketing, etc.). Yearn, for instance, operates at a loss even after accounting for non-operating income from yield farming. As such, retaining protocol revenue alone is likely to be insuffici... See more

How can protocols diversify their treasuries?The simplest method to diversify is to sell some of the protocol's tokens to buy other assets (e.g. ETH, DAI, etc.). Treasuries can’t be diversified overnight. But plans can be made to reach a steady-state allocation over several years.

Risk management To fund future operations, DAOs must manage their currency exposure. Some DeFi and NFT DAOs have treasuries worth hundreds of millions or billions. In addition to funding development and audits, these assets provide insurance if underlying protocols fail and are used for user acquisition and growth. To achieve these goals, DAOs mana... See more

The treasury’s purchasing power should be maintained or grown after accounting for expenses.Diversified asset allocation: The assets in the treasury should be diversified and aligned with the goals of the community.