Hi @Steakhouse team! Thank you for initiating the discussion on RWAs. Adding my 2 cents here. For those of you who attend the weekly Meta-Gov calls, you’ve likely heard interest + educational talks on how the maturing RWA space can potentially affect DAO treasury management strategies.
One of the data points noted in the post above is this:
It’s crucial to note that the yield landscape has transitioned from DeFi outpacing RWA yields to RWA now offering higher returns.
For reference (and to further back up your point), here are two dashboards that I personally track: one that displays the APR yields for some of the top DeFi protocols (Defi Llama); compare that to an RWA dashboard that shows the yield on T-bills (to maturity) right now (RWA.xyz). IMO, MakerDAO is an example of a more mature DAO that has employed RWA strategies in their treasury management – I highly recommend reading through their strategies in their forum. (MakerDAO RWA Forum)
First and foremost, there is the question of why DAOs should employ diverse Treasury Management in the first place. Further to that, what is the balance of achieving sustainable yield while also employing low-risk strategies? My personal opinion is that while more ‘straightforward’ strategies, such as converting ETH to USDC (one that this DAO has done in the past), should be employed, diversification is the foundation of any kind of responsible treasury management.
ENS is one of the few revenue-generating protocols, which means that ENS incurs revenue in the form of ETH on a recurring and continuous basis. But even then, there are risks to keeping too much of that in ETH, especially considering that the majority of important initiatives the DAO funds are in stablecoins such as USDC. (See: [EP 3.3])
The DAO currently keeps almost 100% of its spendable treasury in ETH. While ENS generates protocol revenue in ETH, having so much exposure to a single volatile asset places the DAO in a vulnerable position. [Excerpt from EP 3.3]
The DAO currently manages treasury diversification via its fund manager (EP 2.2.4) in an approved manner (forum post) — and with strategies that are USD neutral and Eth neutral. My opinion is that RWA strategies such as tokenized T-bills fit within that risk profile, with the added benefit of being a great alternative to DeFi yields. In a macro environment with rising interest rates + lower DeFi APY yields, it is a strategy that will (and should) garner interest in the coming years among both institutions and large treasuries, whether they be corporations or DAOs.
While the RWA landscape is still fairly nascent today, and implementing an RWA strategy is likely a 10-step process today (questions as it relates to structure, custody, audits and more), I do think that it is a strategy any large treasury should consider in a volatile market. I also think that as the DAO (and its treasury) grows, RWAs as a treasury management strategy is something we should continue to keep a close eye on and share learnings about.