What Is the Risk of “Assignment” in a Covered Call Strategy and How Does It Affect the DAO?

Assignment is the obligation of the option seller (the DAO) to sell the underlying asset at the strike price when the buyer exercises the call option. This risk materializes if the token price rises significantly above the strike price before expiration.

For the DAO, assignment means its token holdings are "called away," capping its profit at the strike price and forcing it to sell assets it may have preferred to hold for long-term governance or capital appreciation.