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

The first priority for many large protocol treasuries is to diversify a portion of assets into stablecoins. The stablecoin allocation should at least cover a few years of operating expenses for the treasury.

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