What Are the Primary Risks Associated with Storing a Large Treasury in a Single Asset?

Storing a large treasury in a single asset, such as the native governance token, exposes the DAO to significant market risk. If the price of that single asset crashes, the treasury's entire value and the protocol's financial stability are severely compromised.

This lack of diversification makes the protocol vulnerable to targeted attacks or market-wide downturns. A diversified treasury, holding a mix of stablecoins, blue-chip assets, and native tokens, is crucial for financial resilience and longevity.