Treasury Management for Web3 Platforms (For Techies)
What you'll learn
- Need for reserves and Treasury Management for Web3 Platform
- Budgeting, Investment Evaluation, Asset Allocation... Concepts for Treasury Management
- Problems with Treasury Management in Web3 Platforms
- How can we improve Web3 Treasury Management
- Proof-of-Solvency (Proof-of-Reserves)
- Basic understanding on Web3 systems
Update 29th November 2022:
- Added a section covering FTX Crisis and Proof-of-Solvency (Proof-of-Reserves).
- Professionally created captions were added.
What is considered an economic failure of a web3 platform?
Failure to achieve growth - badly designed token engineering which fails to incentivize users to engage with the platform - covered in my token engineering course.
Failure to sustain a growing platform - failures like Terra ecosystem…the platforms implode as it failed to manage growth. - Treasury management.
While so much focus is given on token engineering to take the platform off the ground by incentivizing the users to engage with the platform - much less thinking goes into economically sustaining the platform when it finally archives growth. While the impact of the first kind of failure remains limited to the platform builders and their backers - the failure of the second kind may erase millions or billions of investor funds, can begin ripple effects resulting in the failure of other platforms, and draw unwanted regulatory attention.
As of mid of August 2022, the asset under management for DAO treasuries is more than 10 billion dollars. If we put that into perspective, the AUM for DAO treasuries was just 380 million in early 2021. Managing DAO treasuries is becoming more and more crucial due to the growing volume of treasuries and the systemic risk failure of treasuries pose.
Treasury management is not new - traditional organizations need to allocate considerable resources and time to manage the cash reserves but treasury management is web3 introduces various new challenges and needs much more deliberation. Also, the decentralized nature of decision-making adds to the challenges.
This course looks into how can we go about treasury management for web3 by borrowing well-proven tools used in traditional organizations and what kind of adjustment we may need to use these tools for web3 platforms.
Now, this course will introduce you to various tools and concepts but this is not a standard operating procedure. Treasury management is a complex subject and this discipline for the web3 ecosystem is still evolving. This course is designed to introduce you to the choices you have in treasury management for web3 platforms and how can you deliberate on the choices.
We will discuss the concepts and a broad overview of the tools. Please refer to the study materials for examples of the use of the tools.
So, let us get started
Who this course is for:
- Techies who want to build Web3 Platforms
Sam Ghosh is an engineer, holds an MBA from the University of Calgary, and completed all three levels of the CFA Program.
He has been an entrepreneur in the FinTech domain. He writes for London-based Fintechna and helps grow awareness about Web3 technologies with various kinds of media.
He has written various books on economics. finance and business.