Following a temperature check to establish the Uniswap Treasury Working Group (UTWG), Uniswap DAO has elected two candidates to complete the four-man working group. The UTWG is now set to begin its exploratory role of researching best practices for treasury management for the DAO.
A total of ten candidates submitted an application to fill the two open slots. However, Franklin DAO and Karpatkey received the highest number of votes in a governance round that ended over the weekend.
Franklin DAO has been a delegate and an active member of the Web3 community for about two years. According to them, one of the ways to bolster the Uniswap treasury is to “support adjacent DeFi markets by diversifying into their products” such as digital asset managers and liquid staking tokens.
Karpatkey, also an active delegate in the Uniswap Protocol since August 2023, currently “serves in treasury roles for AAVE, Balancer, CoW Protol, ENS, Gnosis DAO and Lido.” In their opinion, Uniswap should prioritize acquiring stable assets.
The Uniswap Treasury Working Group is made up of four members. Apart from the newly elected candidates, two members were already drawn from the Working Group Zero (WG0) – StableLab and Abdullah Umar.
The Role of the Working Group
Rather than directly determining how the treasury will be handled, the UTWG’s primary objective is to serve as an advisory body, conducting in-depth analysis and presenting recommendations to the Uniswap decentralized autonomous organization (DAO).
Over the course of eight weeks, the UTWG will undertake a rigorous examination of historical attempts at treasury management across various DAOs. This research will be supplemented by interviews with experienced treasury and fund managers, leveraging their expertise and insights. By meticulously studying past successes, challenges, and lessons learned, the UTWG aims to identify optimal strategies tailored to Uniswap’s unique needs and ecosystem.
Upon completing this extensive research phase, the UTWG will publish its findings and recommendations to the Uniswap DAO. This comprehensive report will serve as a valuable resource, equipping the DAO with a deep understanding of treasury management best practices and potential pitfalls to avoid.
Furthermore, the UTWG will deliver at least two additional deliverables, outlining specific recommended next steps for the DAO to pursue. These deliverables may include proposals for establishing a formal treasury management framework, conducting a request for proposal (RFP) process to identify and onboard treasury managers, or implementing governance mechanisms to oversee and guide treasury operations.
Diversification is Key
Uniswap has a treasury of over $3 billion, according to data on DeepDAO. Surprisingly, approximately 100% of the treasury is held in the protocol’s native UNI token. Relying solely on UNI presents several challenges. The value of UNI, like other cryptocurrencies, is subject to significant fluctuations. This exposes the DAO’s treasury to potential instability. Additionally, a single-asset treasury limits the DAO’s options for generating revenue and supporting future endeavors.
The UTWG’s work signifies a growing awareness within DAOs of the importance of responsible treasury management. By diversifying its holdings, the Uniswap DAO is taking steps to ensure its long-term financial health and ability to support the continued growth of the Uniswap protocol.
