How Does a DAO Calculate Its “Runway” and Why Is It Crucial for Treasury Management?

A DAO calculates its runway by dividing its total liquid treasury value by its average monthly operational expenses. The result is the number of months the DAO can sustain its current operations without needing new revenue or external funding.

This metric is crucial for treasury management as it dictates the risk tolerance for investments and the urgency for diversification or cost-cutting proposals, ensuring the DAO's long-term survival, especially during crypto bear markets.