Yearn’s Q1 2021 report is an excellent example of useful treasury disclosure. It contains an income statement, balance sheet, key revenue drivers, operating expenses and salaries, and priorities for the protocol.

It is risky for protocols to only have their own governance tokens in their treasury. If Uniswap has only UNI in its treasury and the token price falls by 40%, its balance sheet would also shrink by 40%. This is dangerous because it occurs at a time when the protocol needs to ramp up spending, whether it is LP subsidies, token buybacks, or core dev... See more

When asked about treasury management tools, only a small handful of our respondents mentioned using Gnosis Safe multisig wallets, which allow DAOs to support treasury security by requiring multiple signers for treasury transactions and are common amongst investment DAOs. Only two DAOs in our study have used Snapshot to carry out community votes eff... See more

A protocol treasury should help grow the network. If managed well, the treasury can serve as a strategic asset that improves the protocol’s market position. If a treasury becomes significant enough, it can fund important public goods, including things in the physical world.