Recurring market commentary on what’s happening in the crypto markets, summarized by the Crypto Broker team at Crypto Finance AG.
Market commentary
Good Morning!
I can recommend the very informative article by Zhu and Hasu, which highlights risks and concerns, but also some potential solutions as to how a DAO treasury can be made more robust. During the past few months, I have taken the time to revisit and dive a little deeper into the various DeFi protocols. Especially the ones on alternative chains (vs Ethereum). For me, however, it is not so much about the different chains per se, but rather about assessing the risk and rewards of each farming, liquidity mining, and staking opportunity.
Now, if you’ve been in the crypto space long enough, you know better than to simply jump on any high yield farming trade. There is always a risk when it comes to high rewards. Most of the time, the risk is as follows: low liquidity for governance token protocols (which is usually the payout currency – high inflation/emission), and/or protocol/smart contract risk, and/or general market moves (high volatility, which can cause liquidation death spirals).
Talent in the crypto space
I do have to admit, though, that I have not focussed enough on the actual DAO treasury composition. Because it does make a difference in terms of mitigating the overall risk you take when you farm on those protocols and earn those governance tokens. And if you like it or not, it does no harm to check how TradFi has tackled similar problems and adapted them in crypto… if it fits.
Now, with the treasuries of DAOs getting bigger, and the treasuries of chain protocols (e.g., Ethereum, Cardano, EOS, and the like) getting bigger, I believe that we will soon feel the lack of talent in the crypto space. In my mind, TradFi treasurers, who are brave enough to dive into the crypto world and have the ability to use their knowledge in a different economic mindset, should be in high demand!
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