According to data from DeepDAO, the cumulative amount of funds across all decentralized autonomous organizations (DAOs) reached a new high of $25 billion last week, up from $10.3 billion hit at this time in 2022. The latest figure is likely boosted by the launch of ArbitrumDAO a few days ago, whose treasury holds over $4.4 billion.
It is worth highlighting that most of the largest treasuries are owned by scaling plays like Polygon, Optimism, and Arbitrum. These crypto projects have overtaken Decentralized Finance (DeFi) protocols such as Lido Finance, Uniswap, and dYdX, which were previously dominant.
But how will these organizations’ treasuries hit $100 billion? Here are some ways:
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A Bull Run
The head of growth at DeepDAO, Aman Deep, says it is possible for DAO treasuries to go beyond $100 billion in the next bull run since most of them hold their funds in native tokens. Simply put, native tokens are non-stablecoins such as Arbitrum’s ARB, Polygon’s MATIC, and Optimism’s OP. That being said, Deep expects the value of these tokens to surge after market conditions improve.
Usage
While we wait for the bull run, usage is another factor that can help boost the current figure held in DAO treasuries. Increased usage of a certain protocol will likely lead to more revenue for its DAO. For example, the liquid-staking platform Lido Finance channels 5% of users’ staking earnings to its DAO treasury. Also, Decentraland transfers about 5% of sales generated on Opensea and the project’s own marketplace to its treasury.
The growing usage of layer-2 sequencers will also bring more revenue for DAOs. Sequencers are the bridge between Ethereum scaling solutions and the mainnet. They earn fees by securely transferring batches of transactions to Ethereum. A good example is Optimism.
Governance Controversy
Along with the bull run and increased usage, governance controversy is another way that could boost DAO treasuries. Considering that the influence of a DAO member’s vote depends on the number of tokens they hold, BitDAO’s public relation officer Igneus Terrenus says most members are looking to scoop up more governance tokens to help them have an influential say in regard to matters affecting their favorite crypto projects.
Terrenus explains that last week’s Arbitrum governance crisis which saw about 80% of ARB holders oppose the AIP-1 proposal, shows a rising DAO consciousness among members.
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Moreover, it appears that holders of Uniswap’s UNI governance token could be buying more to increase their voting power following February’s controversial vote where one UNI whale known as a16z used their 15 million tokens to vote against a proposal to bring Uniswap on BNB Chain.
In summary, the journey to $100 billion will be fueled by governance token holders becoming aware of their roles in a DAO, increased usage of decentralized protocols, and a bull market.
