DAO Treasuries Exposed by Native Token Concentration

DAO treasuries face significant risks due to their reliance on native tokens. According to GSR, most DAOs hold around 70% of their treasury assets in their own native tokens, creating a negative feedback loop.

This concentration can cause treasury value, protocol revenue, and market activity to decline together. When a native token falls, the treasury loses value while protocol activity can weaken simultaneously, reducing fees and liquidity.

GSR recommends that projects ask whether their existing reserves could fund operations for another 12 months, shifting treasury planning toward runway rather than short-term market timing.

The firm also suggests treating hedging as an ongoing treasury policy rather than an emergency response. Projects can establish protection before market conditions deteriorate using collars, which provide downside protection without requiring stablecoin reserves.