Home/Blockchain/DAO Treasury Simulation/Treasury Management

📊 Treasury Management: Asset Allocation

Learn how DAOs diversify and invest community assets

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💼 Treasury Management Strategies

Effective treasury management balances growth, stability, and sustainability. DAOs must allocate assets wisely to fund operations, weather market volatility, and maximize long-term value.

🎯 Interactive Portfolio Allocator

Adjust asset allocation to see risk levels. Total must equal 100% for a balanced portfolio.

Stablecoins(USDC, DAI, USDT)
40%
Native Token(DAO governance token)
30%
Blue Chip(ETH, BTC, major L1s)
20%
DeFi Assets(LP tokens, yield positions)
10%
Allocation Breakdown100% ✓
40%
30%
20%
10%
Portfolio Risk Level
Moderate
Balanced risk/reward
Diversification Score
93%
Well diversified
💡 Recommendation: Strong stability focus. Good for bear markets.

Asset Allocation Strategies

🛡️ Conservative (Low Risk)

Best for: Early-stage DAOs, bear markets, prioritizing survival

• 60-70% Stablecoins • 20-30% Blue Chips • 10% Native Token • 0-5% DeFi

⚖️ Balanced (Moderate Risk)

Best for: Established DAOs, stable markets, steady growth

• 40-50% Stablecoins • 25-35% Native Token • 20-30% Blue Chips • 5-15% DeFi

🚀 Aggressive (High Risk)

Best for: Bull markets, well-funded DAOs, growth prioritization

• 20-30% Stablecoins • 30-40% Native Token • 20-30% Blue Chips • 20-30% DeFi

💰 Revenue Strategies

  • •Protocol Fees: Trading fees, subscription revenue
  • •Token Sales: Strategic OTC deals, vesting schedules
  • •Yield Generation: Staking, LPing stablecoins safely
  • •Partnerships: Grants from other protocols or ecosystems

📊 Expense Management

  • •Pay in Stables: Reduce price volatility for contributors
  • •Milestone-Based: Release funds as deliverables complete
  • •Multi-Sig Control: Require multiple approvers for large spends
  • •Budget Tracking: Monitor burn rate and adjust spending

⚠️ Treasury Management Risks

📉

Market Volatility

Native token crashes can wipe out treasury value. Maintain sufficient stablecoin reserves (12-24 months runway minimum).

🔓

Security Breaches

Multi-sig hacks or compromised signers can drain treasuries. Use hardware wallets, timelock contracts, and reputable multi-sig providers.

💸

Unsustainable Spending

Excessive grants without revenue growth deplete funds. Track burn rate closely and adjust budgets as needed.

🎲

DeFi Exploits

Yield farming or protocol integrations can fail catastrophically. Only use audited protocols and diversify yield strategies.

✅ Best Practices Checklist

✓Maintain 12-24 months runway in stablecoins
✓Diversify across asset types (not just native token)
✓Use multi-sig wallets with trusted signers
✓Publish monthly treasury reports for transparency
✓Set spending limits and require governance approval
✓Rebalance quarterly based on market conditions
✓Avoid over-concentration in single assets (<40%)
✓Build emergency reserves for unexpected expenses