How to Structure a Protocol's Treasury

2. Protocol Grant Programs Community development and protocols can be funded with on-chain treasuries. Protocols support governance initiatives (like grant programs) and have other benefits. They have access to a huge pool of third-party developers, unlike any company or development team. In addition, they give people worldwide a huge economic oppo... See more

Most protocol DAOs currently only hold their native protocol token on their balance sheets. Given the volatile nature of cryptocurrencies, this could mean that DAOs are forced to sell their native tokens during extended bear markets (and therefore at inopportune prices) to finance ongoing operations. Consequently, DAOs should first ensure that they... See more

- Maintain or ramp up spending in the event of a significant market drawdown- Allow governance contributors, grant recipients, and security bounty recipients to be fully or partly paid in stablecoins- Enable yield-generation on Yearn, Aave, and Compound- Provide liquidity on stablecoin-stablecoin pools 

A protocol treasury should help grow the network. If managed well, the treasury can serve as a strategic asset that improves the protocol’s market position. If a treasury becomes significant enough, it can fund important public goods, including things in the physical world.