Study: DAO treasuries too full of their own tokens

Most decentralised autonomous organisations, also known as DAOs, hold the vast majority of their treasury in their own token. That is according to a new report from GSR Research. This approach creates structural vulnerabilities that are felt most acutely precisely in poor market conditions.

In brief:

• On average, 71.9% of DAO treasuries consist of own tokens, with only 17.1% made up of stablecoins
• This concentration creates a negative feedback loop in which treasury, revenue and market activity decline simultaneously
• GSR advises DAOs to separate operational reserves from long-term positions and to use collar strategies

Seven in ten euros held in own tokens

Data from DeFiLlama, collected on 7 August 2026, shows that on average 71.9% of all DAO treasury holdings consist of their own token. Stablecoins account for just 17.1%, while other cryptocurrencies account for 11%. This means that the financial health of a DAO depends almost entirely on the price performance of its own coin.

That is problematic, GSR says in the report. When the token price falls, the treasury shrinks, protocol revenue declines and market activity dries up. These three factors reinforce each other, leading to a so-called procyclical feedback loop: precisely at the moment a project needs the most buffers, they disappear the fastest.

Altcoins regularly experience sharp declines

A second chart from GSR shows that the risks are real. Among the hundred largest altcoins each year, a large share consistently falls by more than 70% from their highest point in the preceding twelve months. In almost every year between 2019 and 2026, this applies to a majority of the tokens examined. In 2022 and 2019, nearly the entire top 100 fell by more than 70%.

This pattern shows that such extreme price declines are not exceptions but a recurring phenomenon. For DAOs that barely diversify their treasury, this is a serious risk. Projects typically only seek protection against price declines after the decline has already begun, at a time when the costs of such hedging have already risen considerably.

Separating reserves and using collar structures

GSR offers two concrete recommendations. First, they advise strictly separating operational reserves, the money needed for daily expenses, from long-term positions in own tokens. This allows a DAO to keep functioning even if the token price collapses.

Second, GSR advocates the use of so-called collar structures. These are option constructions in which a project hedges its downside risk without incurring direct costs, because the premium from the sold call option covers the cost of the put option. In this way, DAOs can extend their runway during a bear market without being dependent on the market at precisely the wrong moment.