kishandaoHow to write a great Treasury Management diversification proposal (featuring BitDAO, Uniswap, FWB, G…
TL;DRPlaying offense by chasing FOMO-driven upside investments is never prudent. Especially in today’s bear market, defensive diversification ensures survival. Great treasury management proposals inspire a community to realize its vision, not promote a financial transaction. This post examines proposals from BitDAO, Uniswap, FWB, and others that achieve this.I include a summarized framework and treasury diversification proposal template to streamline governance initiatives. Framing Treasury m...
kishandaoI’m a big tech employee and want to contribute to DAOs. How should I think about DAO compensation?
TL:DR: DAOs provide an egalitarian environment for growth, tech and operations contributors, where performance is directly rewarded in liquid tokens vs restricted stock. Web 2.0 companies have achieved global scale. Trillions of dollars of market cap and revenue have been built by millions of talented employees. What incentives drove this? As a COO / CFO of growth stage technology companies, I have built, designed, and optimized compensation packages for my companies. Generally, the simplifie...
Crypto CFO: growth + treasury management
kishandaoHow to write a great Treasury Management diversification proposal (featuring BitDAO, Uniswap, FWB, G…
TL;DRPlaying offense by chasing FOMO-driven upside investments is never prudent. Especially in today’s bear market, defensive diversification ensures survival. Great treasury management proposals inspire a community to realize its vision, not promote a financial transaction. This post examines proposals from BitDAO, Uniswap, FWB, and others that achieve this.I include a summarized framework and treasury diversification proposal template to streamline governance initiatives. Framing Treasury m...
kishandaoI’m a big tech employee and want to contribute to DAOs. How should I think about DAO compensation?
TL:DR: DAOs provide an egalitarian environment for growth, tech and operations contributors, where performance is directly rewarded in liquid tokens vs restricted stock. Web 2.0 companies have achieved global scale. Trillions of dollars of market cap and revenue have been built by millions of talented employees. What incentives drove this? As a COO / CFO of growth stage technology companies, I have built, designed, and optimized compensation packages for my companies. Generally, the simplifie...
Crypto CFO: growth + treasury management
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TL;DR
Open standards for DAO financial reporting and benchmarks accelerates decentralization.
Web3 enables more transparency into financial reporting for engineers, community builders, and users, but should not be a time-hassle.
Upcoming DAO infrastructure, tooling and benchmarks will simplify operations and highlight performance.
I have included a financial reporting package template to get started, and example financials.
Why should anyone care about DAO financial reporting?
According to DeepDAO, there are ~2 million DAO members as of April 2022. For context, Forbes estimates 1 billion knowledge workers.
The number of DAO contributors may 1000x over the coming decade, which will require increased coordination. Without accurate and timely financials, product / user / governance decisions will be delayed or avoided.
Until now, decentralized financial management has been in its infancy:
Source: Electric Capital Developer Report and Defi Llama
Wallets are publicly verifiable on the blockchain, which has disintermediated basic financial reporting.
Why bother producing the classic set of centralized Profit and Loss, Balance Sheet, and Cashflow statements, when anyone can check token movement, price, wallet holdings, and monthly DAO grants and contributions?
However, visibility is not transparency.
Enter the current state of DAO financial reporting
A wave of financial professionals have entered web3. Credit to the builders at MakerDAO (financial presentation link) and Aave (financial presentation governance thread via Elliott) for bridging TradFi and DeFi by delivering clear, concise, and timely financial reporting.
New forms of Web3 native accounting software and financial infrastructure are emerging, with use cases ranging from simplifying and aggregating blockchain transactions (Cryptio), rationalizing tax reporting (Ledgible), improving accounts payable (Request Finance), or serving as an all-in-one solution (Multis).
A roadmap for the future
In Web 2.0, the twenty year proliferation of subscription companies (Software-as-a-Service or SaaS) created a host of new comparable benchmarks to gauge financial performance. These include the alphabet soup of LTV:CAC, Rule of 40, Burn Multiple and many others.
These standards have allowed for streamlined decision-making and useful heuristics to determine business health. Standardization is not the enemy of decentralization.
For publicly traded companies, Public Comps aggregates these metrics from SEC filings for investors and operators. Eventually, there will be open standards for DAOs to generate instant comparables to gauge health, performance, and benchmarks.
Open standards and simplified data aggregation enable decentralized decision making.
Think an AMM for labor, where there are spot, dedicated and market clearing prices for contributions and impact. Annualized revenue per monthly active DAO contributor, on-chain in-period revenue growth, or time-to-launch-and-execute governance proposals could be trustlessly verified.
And while DAO treasuries have eclipsed $10B, the best approach will be to avoid the temptation to create a “DAO Hedge Fund” exclusively focused on generating financial returns (i.e., degen) and instead build a regen flywheel where more financial returns > hire more contributors > build more products > gain more adoption > generate more revenue > reinvest back into product enhancements, new products, and even deflationary pricing decreases.
Transparent financial information for contributors and viewers creates a decentralized check/balance versus the urge to ape in on trendy yield-chasing opportunities that are not aligned with the DAO’s vision.
A Template to Fork
I created a ten slide presentation summarizing Key Performance Indicators, Financial Statements, Roadmap and more. See links for:
Presentation: Version to view/comment and version to copy.
Spreadsheet: Version to view/comment and version to copy.
Ping me at @kishandao in case you have any issues.
About author:
@kishandao has 15 years of experience building billion dollar technology companies as a COO/CFO and was previously a growth equity investor at Goldman Sachs.
TL;DR
Open standards for DAO financial reporting and benchmarks accelerates decentralization.
Web3 enables more transparency into financial reporting for engineers, community builders, and users, but should not be a time-hassle.
Upcoming DAO infrastructure, tooling and benchmarks will simplify operations and highlight performance.
I have included a financial reporting package template to get started, and example financials.
Why should anyone care about DAO financial reporting?
According to DeepDAO, there are ~2 million DAO members as of April 2022. For context, Forbes estimates 1 billion knowledge workers.
The number of DAO contributors may 1000x over the coming decade, which will require increased coordination. Without accurate and timely financials, product / user / governance decisions will be delayed or avoided.
Until now, decentralized financial management has been in its infancy:
Source: Electric Capital Developer Report and Defi Llama
Wallets are publicly verifiable on the blockchain, which has disintermediated basic financial reporting.
Why bother producing the classic set of centralized Profit and Loss, Balance Sheet, and Cashflow statements, when anyone can check token movement, price, wallet holdings, and monthly DAO grants and contributions?
However, visibility is not transparency.
Enter the current state of DAO financial reporting
A wave of financial professionals have entered web3. Credit to the builders at MakerDAO (financial presentation link) and Aave (financial presentation governance thread via Elliott) for bridging TradFi and DeFi by delivering clear, concise, and timely financial reporting.
New forms of Web3 native accounting software and financial infrastructure are emerging, with use cases ranging from simplifying and aggregating blockchain transactions (Cryptio), rationalizing tax reporting (Ledgible), improving accounts payable (Request Finance), or serving as an all-in-one solution (Multis).
A roadmap for the future
In Web 2.0, the twenty year proliferation of subscription companies (Software-as-a-Service or SaaS) created a host of new comparable benchmarks to gauge financial performance. These include the alphabet soup of LTV:CAC, Rule of 40, Burn Multiple and many others.
These standards have allowed for streamlined decision-making and useful heuristics to determine business health. Standardization is not the enemy of decentralization.
For publicly traded companies, Public Comps aggregates these metrics from SEC filings for investors and operators. Eventually, there will be open standards for DAOs to generate instant comparables to gauge health, performance, and benchmarks.
Open standards and simplified data aggregation enable decentralized decision making.
Think an AMM for labor, where there are spot, dedicated and market clearing prices for contributions and impact. Annualized revenue per monthly active DAO contributor, on-chain in-period revenue growth, or time-to-launch-and-execute governance proposals could be trustlessly verified.
And while DAO treasuries have eclipsed $10B, the best approach will be to avoid the temptation to create a “DAO Hedge Fund” exclusively focused on generating financial returns (i.e., degen) and instead build a regen flywheel where more financial returns > hire more contributors > build more products > gain more adoption > generate more revenue > reinvest back into product enhancements, new products, and even deflationary pricing decreases.
Transparent financial information for contributors and viewers creates a decentralized check/balance versus the urge to ape in on trendy yield-chasing opportunities that are not aligned with the DAO’s vision.
A Template to Fork
I created a ten slide presentation summarizing Key Performance Indicators, Financial Statements, Roadmap and more. See links for:
Presentation: Version to view/comment and version to copy.
Spreadsheet: Version to view/comment and version to copy.
Ping me at @kishandao in case you have any issues.
About author:
@kishandao has 15 years of experience building billion dollar technology companies as a COO/CFO and was previously a growth equity investor at Goldman Sachs.
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