A Crisis in Protocol Treasury Management And How to Solve It

Cryptonetworks built on permissionless blockchains are quickly becoming some of the most valuable pieces of software in the world. Protocols like Uniswap have already become so successful they are rivaling established companies like Coinbase on a number of fundamental metrics. Simultaneously, there is an increase in the number of protocols that are progressively decentralizing and handing over control to their communities through setting up decentralized autonomous organizations (DAOs). Many of these DAOs now control treasuries worth billions of dollars.

Work With Messari

If you're a representative of a protocol or of a DAO that is interested in working with Messari to conduct an independent risk assessment of your protocol treasury and the ideal portfolio construction, please reach out to jack@messari.io. Your protocol – and its portfolio – might not thank you now, but it will thank you in the event of any market turbulence.

Good Tides & Fat Balance Sheets

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. For context, early-stage crypto networks are in effect startups, but due to the speculative and volatile nature of tokens, they often have multiples more capital than any traditional early-stage company. This situation necessitates a new perspective in how we view early-stage treasury management.

This trend of ballooning treasury values among DAOs is not just limited to the top protocols. In fact, dozens of DAOs have treasuries worth hefty sums of money. In total, the top 38 Protocols’ combined treasuries total over $15 billion - enough to purchase an accurately valued Ripple.