Key Takeaways
Contained in the billion-dollar crypto DAOs of ETH, SOL, Arbitrum & Uniswap. Uncover who actually controls the keys, manages the wealth, and the reality behind this energy.
On this planet of crypto, the treasuries have turn out to be the brand new throne rooms. Swollen with billions, the coffers of main crypto DAOs are beginning to look loads just like the stability sheets of Fortune 500 firms.
This cash isn’t simply sitting there; it’s getting used to steer whole ecosystems, bankrolling all the pieces from fundamental coding to wild bets on real-world property.
However because the piles of digital money get larger, one query retains developing: who’s truly holding the keys?
AMBCrypto, then, determined to take a deep dive into the funds of giants just like the Ethereum [ETH] and Solana [SOL] Foundations, plus high crypto DAOs like Mantle [MNT], Arbitrum [ARB], Optimism [OP], and Uniswap [UNI].
We discovered a messy and fast-changing image of how this wealth is managed, ruled, and continually caught between the dream of decentralization and the fact of concentrated energy.
Crypto DAOs: A glance contained in the titans
The sum of money these teams management is difficult to wrap your head round, and most of it’s paper wealth tied up in their very own tokens.
Mantle DAO, born from the fusion of BitDAO and Mantle, is sitting on one of many greatest piles of money within the sport. On-chain information watchers at DeepDAO peg its worth at about $2.7 billion.
Its vault is a cocktail of its personal MNT token, a hefty quantity of ETH, and a big stash of stablecoins, making it a severe participant in each liquidity and funding.
The Ethereum Basis (EF), whereas not a DAO, mainly serves because the guardian of Ethereum’s core growth fund. It doesn’t publish experiences continually, however when it does, it’s pretty open.
The EF’s 2024 report confirmed a treasury of $1.65 billion, largely in ETH, with a smaller however rising slice in non-crypto belongings.
The muse has just lately began to extra actively handle this cash, hinting that it plans to get extra concerned in DeFi and be extra upfront with its accounting.
Nonetheless impactful Crypto DAOs
Uniswap, the trade that began all of it, has a DAO treasury that on paper is price a jaw-dropping $2.9 billion, in keeping with DeepDAO. The catch? The overwhelming majority of that’s in its personal UNI token.
It is a gamble that ties the group’s survival on to the whims of the market. A separate Uniswap Basis works with a a lot smaller, extra steady pot of cash handy out grants.
The Layer-2 networks constructed to make Ethereum quicker have additionally stacked up large treasuries. Arbitrum DAO’s fund is price round $2.5 billion, and Optimism’s is about $1.3 billion, each in keeping with DeepDAO.
Like Uniswap, they’re overwhelmingly filled with their very own ARB and OP tokens. However Arbitrum is attempting to be smarter about this threat.
It kicked off a program to commerce a few of its treasury for tokenized real-world belongings, largely U.S. authorities bonds, to earn a gradual revenue and shield itself from crypto’s wild swings.
Then there’s the Solana Basis, which stays an entire black field. Whilst its ecosystem has exploded, the muse has been referred to as out for not publishing common, detailed experiences about its cash.
Everybody is aware of it holds a ton of SOL, however no person exterior is aware of the precise breakdown or market worth, leaving its personal neighborhood guessing about its true monetary well being.
So, who holds the keys?
To maintain one individual from operating off with all the cash, these billion-dollar vaults are secured by multi-signature wallets, or “multisigs.” These require a gaggle of trusted folks to log off on any transaction.
Who’s in that group tells you numerous about how decentralized a undertaking actually is.
Optimism’s safety council
The Optimism Collective’s treasury wants two signatures to unlock. One secret’s held by the Optimism Basis, the opposite by a Safety Council of well-known business figures.
Folks like Kris Kaczor from Phoenix Labs and Jon Charbonneau from DBA serve on rotating phrases to maintain issues steady.
Lido’s committee of consultants
Lido DAO [LDO] fingers its treasury administration to a committee that requires transaction approvals from 4 out of seven members.
This group is a mixture of folks you already know by identify and others who’re nameless.
From guardians to self-governance
In a really radical step, Ethereum Identify Service [ENS] took the grasp key away from its crypto celebrities—together with Chainlink’s [LINK] Sergey Nazarov and Metamask’s Dan Finlay—and gave it to the ENS DAO.
Now, the token holders have direct say over the protocol’s treasury and core code.
For a number of the greatest gamers, although, it’s more durable to see who’s in cost. Mantle‘s treasury is run by “core contributors” who supposedly reply to MNT holders, however you gained’t discover a public checklist of their names.
The principle Uniswap DAO treasury is equally opaque about who precisely can log off on transactions, not like its smaller grant-giving divisions.
Development vs. crypto treasury administration threat
Each main DAO is wrestling with the identical downside: what ought to we do with all this cash?
The outdated technique of simply holding a mountain of your individual token is falling out of favor, changed by a way more lively, diversified strategy.
The hazard of a treasury filled with your individual token is huge. A sudden worth crash can wipe out a DAO’s worth in a single day. We noticed this when Uniswap’s treasury cratered from a peak of almost $19 billion in 2022.
It is a horrible cycle: when markets are scorching, the treasury overflows, however throughout crashes when the ecosystem wants essentially the most assist, the cash vanishes.
The smarter DAOs are combating again with a couple of key methods:
Promoting for stablecoins and blue-chips
The primary transfer is to commerce a bit of the native token for dependable stablecoins like USD Coin [USDC] and DAI, or for established cryptos like Bitcoin [BTC] and ETH.
This creates a rainy-day fund to cowl salaries and survive a bear market.
Shopping for real-world belongings (RWAs)
MakerDAO began this pattern, and Arbitrum has adopted go well with. They’re investing in low-risk, tokenized variations of conventional belongings like U.S. Treasury bonds.
This brings in a gradual revenue that has nothing to do with crypto market drama. MakerDAO has already funneled billions into RWAs to shore up the backing of its DAI stablecoin.
Placing the cash to work
These treasuries are not gathering mud. DAOs are staking their belongings, offering liquidity to exchanges, and lending on platforms like Aave [AAVE] and Compound [COMP] to generate further money move.
Centralization and the phantasm of democracy
For all of the speak about decentralized rule, crypto governance usually appears extra like an oligarchy.
The “one token, one vote” system signifies that enterprise capital corporations and some mega-holders can simply outvote 1000’s of smaller contributors.
A 2022 report confirmed that in lots of high DAOs, lower than 1% of the wallets managed 90% of the votes.
This energy imbalance instantly influences how the treasury’s cash will get spent.
Whales and VCs can pressure by way of proposals that profit their very own portfolios.
This implies making large strategic investments or pushing for conservative methods that shield capital as a substitute of funding riskier neighborhood initiatives.
The blow-up over Arbitrum’s first-ever proposal was an ideal instance. The Arbitrum Basis tried to maneuver almost $1 billion in ARB tokens into its personal “Administrative Finances” earlier than anybody might vote on it.
The neighborhood went ballistic, calling it “decentralization theater”—a present of giving up management whereas secretly pulling the strings.
The backlash was so unhealthy the muse needed to reverse course and promise to do higher. Nonetheless, it was a wake-up name for everybody.
The evolving DAO
The job of a DAO treasury is altering quick. They began as easy funds for paying builders. Now, they’re performing like aggressive funding corporations and company raiders.
Protocol-owned liquidity (POL)
As a substitute of regularly printing new tokens to “hire” liquidity from customers, Olympus DAO pioneered a mannequin the place the DAO owns its liquidity swimming pools outright.
By promoting its personal tokens at a reduction for belongings like ETH or stablecoins, a DAO builds a everlasting capital base that earns buying and selling charges and helps stabilize its token worth.
Mergers & acquisitions (M&A)
We’re now seeing the primary wave of crypto M&A.
The merger between Fei Protocol and Rari Capital and Gnosis DAO’s buy of the CowSwap group present a brand new playbook for rising, grabbing expertise, and cornering the market.
Crypto DAOs proceed to develop
As these DAOs use authorized tips like Wyoming LLCs or Swiss foundations to work together with the standard monetary system, their energy simply retains rising.
The transformation of their treasuries from easy grant funds into advanced, multi-asset funding machines will form the way forward for your complete decentralized world.
The combat for who controls these digital vaults can be a combat for what crypto will turn out to be.