DAO Treasuries are a tool for Fundraising
With the current bull market, DeFi projects hold now relevant treasuries concentrated in their governance tokens (UNI, COMP, etc).
Source: https://open-orgs.info/
I see these community treasuries as the equity of a startup or a company.
They can be used to incentivize people's contributions to improving the project’s ecosystem. They can be distributed in the form of grants, liquidity mining or by funding working groups for example (“startups” within the community).
One way to do that would be distributing vested governance tokens to better align the contributors with the long-term success of the protocol.
Following Eric Ries's vision on The Startup Way, a project community can support a combination of multiple startups working for the benefit of the project. Another book on this new way of working is Team of Teams.
So, when we talk about treasury diversification, for me, it is more about startups doing a funding round (series A, B, C, etc) or as companies issuing stock in the capital markets to fund growth plans.
I see that is natural to the community holding governance tokens (or in other words hold their equity) and I think, in general, it would not be necessary to diversify beyond stables.
Actually, the term “diversifying” may be misleading. When a company issues stocks or startup make a funding round, we do not say they are diversifying.
That’s why I think projects selling their governance token could happen when associated with a plan to use of the stable coins. It is like a follow-on. Current token holders need to know what is the plan and why they should “raise stable capital”. Thinking in startup terms, what will be their runaway.
For sure, in a bull market, when you feel the project is well valued by the market, it is a good time to raise stable money to prepare for the winter.
My take is just to frame it, not as a diversification per se, but as a stable coin fundraising. You will increase the selling pressure on your stock in the present and equity is better to align contributors in the long term. In this sense, I am also a believer in the buy-back and make model proposed by Joel Monegro, that can enable a sustainable incentive distribution mechanism and foster a thriving community.
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