A Crisis in Protocol Treasury Management And How to Solve It

The bull market has caused DAO treasuries to balloon over the past year, with the top ten treasuries now holding assets worth hundreds of millions, or in some cases, billions of dollars. While having lots of capital isn’t typically a problem, ineffective management of that capital can be detrimental in the long run. During a bull market, the proverbial tide raises all assets. In crypto, this reigns especially true. However, when the tide shifts and corrections ensue, the economic fortunes of DAOs and their balance sheets will shift with it. The key element to remember about corrections and black swan events is that they happen suddenly and are by nature surprises. An analysis of the current DAO landscape shows a crisis in protocol balance sheet management.