The goal of treasury spending is to reward core contributors and attract the right set of new contributors.

They are a vehicle to express the values of a DAO and increase its longevity. 

Anything in a DAO that can be automated should be. Anything that can’t be automated should be funded by the treasury. Treasuries help DAOs fund critical development, attract contributors, and grow their network.

Anything in a DAO that can be automated should be. Anything that can’t be automated should be funded by the treasury. Treasuries help DAOs fund critical development, attract contributors, and grow their network. They are a vehicle to express the values of a DAO and increase its longevity.

There are four functions to help manage DAO treasuries:

Contributor payments: make a bulk of contributor payments in stables while long-term contributors are partly paid in vested protocol tokens

Treasury allocations should ensure that critical expenses can be funded even if the protocol token has a significant drawdown.

Yearn’s Q1 2021 report is an excellent example of useful treasury disclosure. It contains an income statement, balance sheet, key revenue drivers, operating expenses and salaries, and priorities for the protocol.

Diversifying into stablecoins provides a protocol DAO with the following benefits: