Remedies for DAO Treasury Management
Where to Begin?
We highlighted some of the commonly-faced challenges to treasury management in here. In this post, we want to float some ideas about how best to tackle these problems.
Previously, we’d mentioned that it’s hard to make treasury decisions when faced with a wide myriad of choices in DeFi. Paralysis by analysis is a very real thing. An initial step, which could help framework a holistic approach to treasury management, would be to map out a project’s roadmap.
This entails looking at team and operating expenses and modeling out the burn rate against the roadmap. Some questions to consider:
What are the milestones for shipping products and what is needed to get there?
What areas will ramp up in headcount and operating expenses?
What are the administrative expenses like legal, accounting, marketing, etc. that can be easily overlooked?
Are there plans to raise another round, or TGE? If so, what needs to be accomplished before then, and how much will it cost to get there?
From there, teams can back-calculate just how much burn rate and also runway they have.
What’s Next?
Then comes the interesting part of mapping the burn rate to the current treasury and calculating the necessary returns to get to a milestone. Many teams would be surprised to find that with a reliable treasury return, there may not be a need for a next raise or further dilution.
With a holistic analysis and an expectation of risk and reward, projects would benefit from automating treasury solutions so that building and shipping can become the main focus. Imagine a dashboard that details performance and exposure, so that information is all in one place. It’d also be helpful to have simple, curated strategies that make it easy to achieve treasury objectives. Furthermore, risk monitoring for selected strategies and alerts for parameters and actions would both empower and relieve the stress of project treasury teams.
Guess What?
Exponent is working to build all this and more. As Web3 expands and matures, as more and more talented teams grow and enter this space, we want to make optimal treasury management the least of your worries.
Here to Help
If you’re an early-stage Web3 project, reach out to us. We’re happy to chat about your operational requirements and help you achieve your treasury management goals. Work with us, so you can focus on developing your product. 😊
You can reach us via Twitter, Discord, or email. We’re always happy to chat!
If you want to learn more about Exponent, visit our website or read our docs
