Problem[edit]
Decentralization has clear benefits, but few organizations thus far have managed to land on a sustainable implementation when it comes to decision-making, especially around treasury management. This hinders progress, as initiatives must be voted on to receive funding. Voter apathy, voter fatigue, and lack of quorum slow down organizations and can even lead to frontrunning if the treasury strategy is exposed to bad actors.
For example: an organization wants to participate in generating DeFi yield to fund its activities, but its owners don't have the expertise in the highly technical field of treasury management. They also want to retain full custody of their treasury and have concerns about creating a new multisig solely for this purpose.
Solution[edit]
Organizations can try delegation of authority with scoped permissions, essentially enabling external parties to manage their treasury in a non-custodial, trust-minimized way. By delegating permissions to specific addresses, a DAO can enlist treasury managers to outline strategies and request access to a set of whitelisted contracts, reflecting a pre-agreed upon DeFi strategy — all without requiring trust or custody of funds.
Just like how everyone doesn’t necessarily need to vote on whether a bug should be fixed or not, treasury experts — who can be revoked from their roles at any point — can also act to ensure that treasury decisions are made in an open, equitable, and efficient way.
Example[edit]
Solution providers:
- Avantgarde DeFi: non-custodial, trustless asset management for DAO treasuries, enabling the solution case.
- Karpatkey: non-custodial, trust-minimized DeFi strategies for DAO treasuries using the Zodiac Roles Modifier and Zodiac Pilot
