How do we manage the money? What deserves treasury spending and what doesn’t? How should we diversify the treasury’s assets? Should we borrow capital? Most DAOs are still figuring this out. The best practices are being written. We’re all exploring this new frontier together. But there’s one thing for sure: DAO treasuries are massive. So how should DAOs approach treasury management?

How DAOs should approach treasury management
There’s over $14B sitting in DeFi treasuries. How should they manage it?

Types of assets:

  • $DAI, $USDC, $USDT
  • Yield-generating variants like aTokens, cTokens, yTokens, ptTokens,...
  • LP pairs where both assets are correlated stablecoins ($OHM/$FRAX)
  • Indices like $SYI (@indexcoop) and $DPI

Stablecoins are not without risk:

  • Credit risk of the issuer (e.g. insufficient collateral)
  • Smart contract failure (e.g. bugs/exploits)
  • Legal/Regulatory (e.g. government intervention)
  • Purchasing power risk (e.g. return less than inflation)
While recent asset price falls have taken some of the shine off of the defi bull market, the trend towards treasury diversification continues unabated.
Treasury Building Blocks: Stablecoins
Examining the role of stablecoins in protocol treasury management

"With price inflation front of mind particularly among crypto enthusiasts, it can be hard to see the appeal of holding a fiat linked asset. On the other hand, stablecoins offer a few key benefits that crypto native assets generally lack."

DAO Treasury/Balance Sheet Management
Recommendations/guidance on how DAOs should think about managing their balance sheets, and some of the instruments available for doing so.
How to Structure a Protocol’s Treasury — Mirror
How should a protocol like Uniswap or Compound structure its treasury? This post covers the principles of protocol treasury management, fiscal policy, asset allocation, ways to diversify the treasury, and responsibilities of a treasury committee.
Gitcoin Governance is Live on Tally
Tally now supports GTC voting and delegation
Treasury Building Blocks: stETH
Examining Lido Finance’s stETH as a treasury reserve asset

SushiSwap’s community has approved a proposal to build sushiHOUSE, a fully-customized treasury management solution built by the Yam Finance team. SushiSwap continues its role as a groundbreaker in DeFi by electing to diversify its treasury using the First Treasury Management Solution Designed Just for DAOs — by DAO House, a division of Yam.

Yam Welcomes sushiHOUSE To The Neighborhood
New Construction: sushiHOUSE. An innovative solution for sheltering and protecting SushiSwap’s most valuable asset — its treasury.
livethelifetv/yam-www
Web application for the Yam protocol. Contribute to livethelifetv/yam-www development by creating an account on GitHub.
Love to slip under the sheets of the bed index

Now, what about a real-life example?

The BED index is meant to track crypto’s top 3 investable assets. The index is a full portfolio solution brought to life by Index Coop. BED and Bankless have great brand recognition and Bankless will use its media platform spanning video, podcasts, and articles to educate newcomers on the assets in the BED index. Additionally, the BED index could become a tool to diversify the treasury of the Bankless DAO?  The Bankless $BED Index passed through @indexcoop decision gate #2. Equally weighted between BTC, ETH, & DPI, BanklessDAO will receive 0.125% fees streamed directly to its Treasury. (snapshot vote)

Building a Decentralized Blackrock
How the Index Coop is aiming to build a decentralized investment management fund
Bankless DAO
We want a money system by the people and for the people. We want to propagate crypto media and culture. We want to help the world go bankless. Help grow the world’s first-ever media and culture DAO. Bring your talents, time, and ideas. Join the revolution.

Last but not least, a fresh tool to explore:

Imagine earning interest on your treasury. Imagine custom strategies for treasury diversification and token buybacks.
Parcel

"Crypto treasuries offer the promise of transparency and community empowerment. But to realize this promise, we need to build tools and frameworks to organize treasury data, produce real-time financial statements, audit those statements, and rate the treasury’s financial health." - Shreyas

Crypto Community Treasuries — Mirror
Crypto treasuries are typically thought to be transparent. But if a community member needs to spend several hours digging through Etherscan, Snapshot, and Discourse to get a summary of the treasury’s activities over the past month, is the transparency useful?
Coordinape
YFI Coordinape

Treasury spending:

  • v1: Grants programs: similar to UNI, COMP, AAVE programs
  • v2: Committees and DAOs make treasury allocations within their mandate
  • v3: Decentralized treasury spending (@coordinape)

Asset allocation:

  • v1: Diversification into stablecoins & yield optimization (@indexcoop)
  • v2: Token buybacks at discount, incentives, liquidity provision
  • v3: M&A, early-stage investments from grants programs, insurance

Borrowing:

  • Deposit collateral into @AlchemixFi, or @MakerDAO & borrow against it.
  • Unsecured loans for highly rated treasuries, bond issuance, ...
  • Fund ops, acquisitions, or yield farming with debt (h/t @niemerg)

Reporting:

Recruiting:

  • The recruitment process for DAO treasuries should be streamlined
  • A treasury DAO to onboard & train the best ppl to work at treasuries & curate the best opportunities for these ppl (cc @llamacommunity_)
  • DM if you're looking for opportunities to work with DAO treasuries!
Creator & curator DAO treasuries will be different from Protocol DAO's:
  • Distribute tokens to tastemakers, e.g. cryptopunk holders
  • Recruit new creators by buying their NFTs
  • Swap tokens w similarly aligned communities
  • Airdrops to active members

This is a strategy that fits our UnbanksyTV DAO like a glove! Can't wait to play around with all these tools and discover the most efficient way to make treasury management transparent, automated, and simplified.