What Is the Primary Risk Associated with a DAO Treasury Holding a Highly Concentrated Native Token Portfolio?

The primary risk is extreme exposure to market volatility and price fluctuation of a single asset. A concentrated portfolio means the DAO's financial health is directly tied to its token's performance, leading to a shrinking runway during bear markets.

Furthermore, attempting to sell a large portion of the native token to fund operations can trigger significant market slippage and panic selling, destabilizing the token's price and the DAO's governance. Diversification is key to mitigating this systemic risk.