How DAOs can manage and balance a good portfolio

DAOs are reinventing the future with no single entity owning it. DAOs are so new that numerous experiments are carried out to allocate capital and incentivize the people involved to achieve a common goal.

In anticipation of securing funds for the future, DAOs are spending very cautiously.

So, is this making them grow slowly?

Tracking what other projects are working allows different scenarios to be measured and optimized to put the company's treasury balance sheets in the best place, especially when budgeting, liquidity planning, and maximizing the treasury assets. The successful management of crypto treasuries will give significant insights into the innovative ideas and set an example helping other DAOs and crypto companies.

Building a Healthy Treasury

Creating a stable treasury with all the operational costs requires that the inflows should exceed the outflows. DAOs can achieve this by having a diversified portfolio with different digital assets.

DAOs have their treasuries worth billion-dollar locked on Gnosis Safe. Note:- Over 80 billion dollars are locked on Gnosis safe protocol with more than 90% in erc20 tokens which include DAOs native tokens and stable coins.

Optimising Treasury Assets

The long-term holders are genuine supporters and believers considered by DAOs for their treasury growth -

  • Community plays a vital role in building strategy, decision-making, and management activities—creating a community committee that only looks into the treasury-related proposals or anything related to it. The best example can be the $25 million Flipside’s proposal to Uniswap, where the decision was dependent on community votes. Although it got canceled due to a bug.
  • Fund initiatives within the ecosystem in the native tokens. For example - Aave community grant program reserved ~$1.1B or ~3m AAVE from its treasury to fund the projects within the ecosystem.
  • A Treasury multisig committee can be created which can keep track of the DAO initiatives, and their upcoming initiatives help them decide which tokens to add or replace from the treasury portfolio.

    The committee can decide the diversified allocation to various defi protocols like token sets, AMM pool, and yield aggregators.

    For Example, LDI (Llama diversified index)
    $LDI provides a diversified portfolio of productive crypto assets as a single, passive solution for DAO treasuries and individuals alike.
  • Partnership with the other projects that are helping other DAOs for outsourcing their treasury management like YAM finance’s DAO House and Llama. We’ve shared a detailed post on - How DAOs are helping other DAOs in Treasury Management.
  • Treasury chart - Inspired from the Treasury chart in the traditional world.
    In order to check future incoming and outgoing payments, creating an 8-week, 13-week, or 26-week Treasury chart will help you find which funds can be further used for yield and take on more advanced capital management techniques.

Existing portfolios for crypto treasuries

Various existing and upcoming DAOs like UniSwap, Compound grants, Aave, Gitcoin, Yam finance, Sushi swap, Pool Together, and many more have already started experimenting with different ways to manage their treasuries.
Example -  Aave Treasury dashboard

About Multisafe

MultiSafe aims to simplify crypto treasury management for Companies & DAOs - built using Gnosis Safe, IPFS & Filecoin.

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