Amidst the volatile landscape of digital currencies, many DAOs (Decentralized Autonomous Organizations) are opting to raise funds through token sales to bolster their finances and mitigate token devaluation risks. This strategic shift stems from the desire among cryptocurrency projects to diversify their asset holdings, exemplified by the recent 20% decline in Uniswap's governance token, UNI, attributed to regulatory scrutiny from the United States Securities and Exchange Commission (SEC).

Doo Wan Nam, co-founder of StableLab and author of Uniswap's Treasury Working Group Proposal, emphasizes the importance of avoiding overreliance on a single asset due to the inherent volatility and risks associated with crypto assets. To address this issue, the Uniswap DAO has convened a team of experts tasked with researching alternative treasury strategies. Over an 8-week period, the group will explore diversification options for Uniswap's $6.4 million treasury, which was previously predominantly held in UNI tokens.

This concentration of treasury funds in the native token is not unique to Uniswap. Avantgarde's research on behalf of Arbitrum DAO revealed that over 90% of the top 25 DAOs' treasury funds were invested in their own tokens. Diversification has emerged as a crucial factor for organizational stability, enabling DAOs to withstand cryptocurrency price volatility and mitigate losses.

An illustrative case is CoW DAO, managing the decentralized exchange platform CoW Swap, which recently adjusted its treasury holdings by allocating 88% to its native token (COW) and 12% to stablecoins such as USDC and DAI, as well as staked and unstaked ETH. While prioritizing safety, CoW DAO can generate revenue from assets like liquidated ether tokens, yielding approximately 3% to 4%.

Nam advocates for DAOs to consider allocating a portion of their treasury to traditional currencies or stablecoins with yields to hedge against crypto market volatility. However, excessively spreading resources may lead to the same issues, potentially devaluing the organization's native token. Devansh Mehta, a member of the Arbitrum DAO team, cautions against oversubscription, which could conflict with the DAO's primary objective of promoting their ARB token.

Despite the challenges they face, DAOs continue to navigate through turbulent waters. For instance, Arbitrum DAO recently voted to reallocate 35 million ARB to stable and profitable assets after a comprehensive voting process lasting approximately four months. This demonstrates careful consideration of ecosystem development and financial aspects within the DAO.

As the Web3 landscape evolves, Uniswap and Arbitrum are pioneering innovative strategies for managing decentralized treasuries. Sustainable development and risk management remain central to these organizations as they adapt to the dynamic enterprise world.