How Does a DAO Treasury Use Cryptocurrency Options for Risk Management?

A DAO treasury uses options for hedging against market volatility or generating yield. By purchasing put options, the DAO can secure a minimum sale price for its crypto holdings, protecting against a sharp decline in value.

Conversely, selling covered call options generates premium income on assets the DAO intends to hold, effectively lowering its cost basis and funding operations. This strategy limits upside potential in exchange for immediate, low-risk revenue.