What Are the Primary Asset Classes a DeFi Treasury Should Consider for Diversification?
The treasury should focus on a mix of stablecoins (USDC, DAI) for immediate liquidity and operational expenses, blue-chip cryptocurrencies (ETH, BTC) for growth and store of value, and potentially assets that generate yield through staking or lending. A small allocation to assets like tokenized real-world assets or commodities can also be considered for maximum risk mitigation, depending on the protocol's risk appetite.
Glossar
DeFi Treasury
Allocation ⎊ A DeFi Treasury functions as a capital pool, strategically allocated to support protocol development, incentivize user participation, and manage operational expenses within a decentralized ecosystem.
Asset Classes
Capital ⎊ In the convergence of cryptocurrency, options trading, and financial derivatives, capital denotes the resources deployed for generating returns, encompassing both tangible and intangible forms.