By 0xJulCaesar

In the rapidly evolving world of Decentralized Autonomous Organizations (DAOs), effective treasury management has emerged as a critical factor for long-term success. Recognizing this, the Centrifuge DAO is taking a proactive step by introducing the Treasury Advisory Group (TAG) – a dedicated team of experts tasked with advising on all treasury-related activities.

The Need for TAG

The crypto space has witnessed numerous promising DAOs falter due to mismanaged treasuries. As DAOs grow in complexity and scale, the need for sophisticated treasury management becomes increasingly apparent. Learning from these experiences, Centrifuge DAO is implementing TAG to ensure sustainable growth and responsible resource allocation.

What Will Change?

With the introduction of TAG, Centrifuge DAO members can expect several positive changes:

1. Improved Information Access: Easy-to-understand reports and visualizations of treasury status and proposal implications.

2. Structured Spending Process: Recommendations of how to align spending with DAO objectives and rigorous proposal evaluation.

3. Increased Accountability: Implementation of reporting processes for funded proposals to ensure proper use of resources.

4. Community Education: Regular sessions and content to help members understand treasury management principles. Transparent and professional treasury management builds confidence among DAO members and potential investors.

5. Improved Governance: TAG brings together professionals with diverse backgrounds in finance, DeFi, marketing, and collaborative budgeting. They will provide objective, non-binding assessments of treasury proposals, helping CFG holders make informed decisions. Their assessments will lead to more informed voting and decision-making within the DAO.

6. Long-Term Financial Thinking: The group will model treasury funds over time, ensuring sustainable resource management. By carefully managing resources, Centrifuge can fund development and expansion over the long term.

7. Risk Mitigation: Proactive treasury management helps prepare for market volatility and unforeseen challenges.

Learning from Past Experiences

The crypto space has seen its share of DAO treasury mismanagement. For instance:

• The DAO hack in 2016, where poor smart contract management led to the loss of millions in Ether.

• More recent cases where DAOs depleted their treasuries during bull markets, leaving them vulnerable during downturns.

These examples underscore the importance of professional treasury management and the need for structures like TAG.

Roadmap

Through the end of the year, the TAG will deliver:

• A comprehensive Treasury Report detailing the state of spending, a breakdown on where the current holdings of 18,031,920 CFG originate from, a summary of which proposals have been funded, and which have not, plus a host of other details for those who want a snapshot of crucial data.

• An RFC Amending Centrifuge Proposal 2 (Request for Funding) (CP-2), aiming to make the process more rigorous for prospective treasury fund proposers.

• A proposal for Spending Goals and Objectives for the Centrifuge DAO regarding use of the Treasury.

• Education measures such as presenting treasury analysis findings at the invite-only Active Contributors call on 4 September and in the Centrifuge Governance Call on 18 September (open to everyone) as well as potential additional calls throughout the year

Conclusion

The introduction of the Treasury Advisory Group marks a significant step forward for the Centrifuge DAO. By learning from past challenges in the DAO space and implementing a structured approach to treasury management, Centrifuge is positioning itself for sustainable growth and effective governance. As the DAO landscape evolves, initiatives like TAG will become standard practice, and Centrifuge is proud to lead the charge.

Stay tuned for updates as TAG begins its work and helps shape the future of Centrifuge DAO!