How Can a DAO Use Performance Metrics to Justify Treasury Spending?
A DAO can use clearly defined Key Performance Indicators (KPIs) and performance metrics to justify treasury spending by linking funding proposals directly to measurable outcomes. For example, a proposal for a marketing budget might be contingent on achieving a specific user growth rate or Total Value Locked (TVL) target.
This data-driven approach ensures that treasury funds are allocated efficiently, with a clear return on investment, and holds recipients accountable for delivering results.
Glossar
Key Performance Indicators (KPIs)
Volatility ⎊ Key Performance Indicators (KPIs) within cryptocurrency, options, and derivatives trading represent quantifiable metrics used to assess risk-adjusted returns and the efficacy of trading strategies, often focusing on implied volatility surfaces and their relation to realized volatility.
Performance Metrics
Latency ⎊ Performance metrics in derivatives trading quantify the efficiency and speed of a system, with latency being a primary concern for high-frequency strategies.
Performance
Evaluation ⎊ Performance, within cryptocurrency, options, and derivatives, represents a quantified assessment of strategy efficacy, typically measured by metrics like Sharpe ratio, Sortino ratio, or maximum drawdown, adjusted for risk-adjusted returns over a defined period.
Total Value Locked
Collateralization ⎊ Total Value Locked, within decentralized finance, represents the aggregate value of crypto assets deposited in smart contracts, functioning as collateral for various protocols.
Treasury Spending
Allocation ⎊ This term describes the deployment of on-chain reserves, often managed by a DAO or foundation, to fund ecosystem development, security bounties, or liquidity provision for derivatives markets.