# DAO Treasury Management Research List

1. How are you DAOing? 20 DAO Treasuries analyzed | 2023
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4604968
My takeaways:
2. Towards Fair presentation of DAO Treasuries
https://www.researchgate.net/publication/371239775_Towards_Fair_Presentation_of_DAO_Treasuries_An_Evaluation_of_Native_Governance_Token_Reporting_Practices

My takeway: Asset Classification Decision Tree
*Figure 2: Decision-tree to classify native governance tokens*

3. https://www.coinmetro.com/learning-lab/dao-treasury-management-practices
My Takeway: General Best Practices guidlines

General Takeaways:

- Accurate treasury accounting and tracking is crucial, even if its fragmented, it needs to be well documented
- Minimize delay in financial reporting of treasury to the commuity members
- 81.67% of the top 20 DAO treasuries remain concentrated in native tokens, when this is the case, if native token market cap is greatar than DAO trasury value and Native DAO token value in treasury, the DAO token is overvalued. Tracking this metric can help devise strategies.
- High concenration of native tokens causes extreme operational volatility

4. Cross chain govenance :
- https://unlock-protocol.com/blog/crosschain
- https://gov.uniswap.org/t/cross-chain-bridge-assessment-process/20148

#### Gov Attacks to learn from
The Beanstalk DAO loss of $182M demonstrates the vulnerability of snapshot-based governance to flash loan manipulation.Sigma Prime Prevention requires voting delays, minimum holding periods, and snapshot-based voting systems.

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*This following section was derived with the assistance of Claude AI*
### Key Insights on Timelock/Fully On-chain Treasury Implementations

Here's a focused summary of the research findings specifically addressing how timelock/fully on-chain treasuries have performed across different DAOs, with emphasis on governance attacks, threats, and critical lessons:

## Major On-chain Treasury Attack Vectors

1. **Governance Attacks**
- **Compound DAO**: Attackers acquired 228,000 COMP tokens (81% of quorum) to pass a malicious proposal transferring $24M to their controlled protocol
- **Beanstalk DAO**: Lost $182M through flash loan manipulation of snapshot-based governance
- **Critical vulnerability**: Low voter participation (often <10%) enables hostile takeover with relatively small token positions

2. **Technical Vulnerabilities**
- **Smart contract bugs** have caused significant treasury losses across multiple DAOs
- **Key management failures** (lost keys, compromised signers) remain persistent operational risks
- **Integration risks** from third-party protocol failures can impact treasury security

3. **Financial Management Risks**
- **Extreme concentration in native tokens** (81.67% of top 20 DAO treasuries) creates volatility exposure
- **Nouns DAO**: Fork mechanism enabled $27M treasury outflow, creating exploitation opportunities
- **Liquidity crises** during market downturns for DAOs without stable asset reserves

## Essential Protective Mechanisms

1. **Timelock Implementations**
- **Delay periods**: Successful implementations use 48-72 hour timelocks for treasury actions
- **Arbitrum's approach**: Dual governance system with different timelocks for different treasury actions
- **Escalation paths**: Emergency override capabilities with higher quorum requirements

2. **Multi-signature Security**
- **Optimal configurations**: 3-of-5 or 4-of-7 multisig setups balance security and operational efficiency
- **Gnosis Safe**: Industry standard securing over $100B in assets
- **MakerDAO model**: Professional custody integration while maintaining on-chain governance control

3. **Governance Innovations**
- **zkSync's multi-body approach**: Three independent governance bodies with distributed authority
- **Participation incentives**: Gas-free voting, delegation systems, and rewards for active governance
- **Specialized committees**: Treasury-specific governance with professional management oversight

## Critical Lessons & What to Avoid

1. **Governance Design Pitfalls**
- **AVOID**: Low quorum requirements (Compound's attack exploited this weakness)
- **AVOID**: Single-signature authority for any treasury functions
- **AVOID**: Snapshot voting without timelock protection (vulnerable to flash loan attacks)

2. **Treasury Management Failures**
- **AVOID**: >60% concentration in native tokens (causes extreme operational volatility)
- **AVOID**: Insufficient stable asset reserves (minimum 2 years of operational expenses recommended)
- **AVOID**: Rapid large-scale treasury movements (causes market impact and exploitation opportunities)

3. **Implementation Risks**
- **AVOID**: Untested treasury contracts (multiple independent audits required)
- **AVOID**: Geographic concentration of key signers
- **AVOID**: Lack of guardian/security council oversight for emergency situations

### Successful Models to Consider

1. **MakerDAO's Institutional Integration**
- Professional asset management through Monetalis Clydesdale Vault system
- $1.25B+ in US Treasury bonds with 4.5% yields while maintaining on-chain control
- Hybrid governance structures combining traditional finance compliance with on-chain voting

2. **Arbitrum's Tiered Approach**
- Core Governor (5% quorum) and Treasury Governor (3% quorum) for different decision types
- Security Council for emergency capabilities without compromising routine governance
- Professional treasury management through non-custodial structures (karpatkey and Aera)

3. **Gauntlet's Autonomous Execution**
- Quantitative risk management with guardian oversight
- Cryptoeconomic modeling and quantitative risk assessment
- Professional risk analysts with aligned incentives through performance-based rewards/penalties

The research indicates that successful on-chain treasury management requires balancing automation with human oversight, implementing robust security frameworks, and designing governance systems that prevent attack vectors while maintaining operational efficiency.

*End of AI assisted section*

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### Conclusion:
three critical success factors: systematic diversification beyond native tokens, professional service provider integration, and robust governance mechanisms that balance automation with community contribution