Coinvise Tutorials
Coinvise Tutorials
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Setting up Treasury Management & Governance
Setting up Treasury Management & Governance
Setting up Treasury Management & Governance
Setting up Treasury Management & Governance

Setting up Treasury Management & Governance

💛
Now that you have a token, let's setup treasury for your tokens and governance to efficiently run your community autonomously.
 
The purpose of any decentralized community is to capitalize on itself in such a way as not only to ensure its ongoing operations can continue but also to invest in the future growth and success of the community and projects.
As a community leader, you'll have three primary missions: Distribute ownership to community members, manage the Treasury of your community and create governance mechanisms. Luckily, there are handy tools that can help you through this. In this document, we'll explore some of the tools you can use to run your community efficiently and go through important concepts you must know.
1/ Allocating and diversified your Tokens
When creating your Token on a Fixed supply model, you'll have complete power over the distribution of the native Token. It means that you can choose how you want to allocate your tokens. There are many areas where you can allocate funds such as Treasury, allocations for team/community, vested over time for airdrops, bounties or other incentives etc. If you're interested in seeing real-life examples of excellent token allocation, we recommend you read the "$FF Hello World" article from the Forefront community.
The diversification of your tokens is also an important area to focus on when running a community. Indeed, by having the entirety of your Treasury held in your native Token, if the price of your token falls, let's say by 40%, your balance sheet will also shrink by 40%. A priority for many communities' treasuries is to diversify a portion of assets into stablecoins. The stablecoins allocation should at least cover a few years of operating expenses for the Treasury. To deal with these risks, people in the crypto ecosystem have invented the Range Tokens. Range Tokens are financial instruments developed on the UMA derivatives protocol that enable DAOs to diversify their treasuries away from their native tokens without selling them immediately. If you're interested in learning more about this, we suggest you this article and this article.
2/ Distribute ownership to community members.
Once you have created your Token and have a clear use case, the community's founding member(s) can start distributing ownership. To do so, different good practices are often used in DAOs.
1.1 creating a Multisig Wallet with Gnosis.
You can create an account on Gnosis to store and distribute ownership. A multi-signature wallet allows you to define an access/control scheme through multiple signers that need to confirm transactions before executing them. Gnosis Safe is a smart contract wallet that runs on the Ethereum blockchain.
Put simply, a Multisig allows you to share control over the funds with multiple people while preventing them from being lost due to a single point of failure. Instead of having all your Treasury in the hands of one person, by setting up a Multisig, you'll make sure no one can spend the money without the agreement of other persons in the Multisig.
1.2 Create Guilds/Working groups
Creating a Multisig is not the only way to distribute ownership. Another good practice is to develop Guilds or Working Groups that will be in charge of specific missions within your community. By creating these working groups, you'll be able to allocate funds to specifics teams and organize your community more thoughtfully.
3/ Managing your Treasury
A crypto community treasury consists of crypto assets in a wallet owned and operated by the community. It is like a community savings account with assets in crypto (no fiat), typically held in a multisig wallet (not a bank account), managed by the community (not a CFO/CEO), and public (not private). Well-managing the Treasury is not a small task. Whether it's hosting events, funding projects, or even compensating members for their efforts, you'll need to allocate your tokens thoughtfully.
3.1 Incentivize community members
An essential part of managing your Treasury is to allocate your fund to the right contributors, helping them achieve their goals. To do so, one of the most efficient ways is to create Grant programs, where anyone can submit a proposal for a project and, if enough people in the community find it helpful and vote for it, receive the grant. You can also use the Treasury to incentivize new contributors and to create a loyalty scheme (you could Airdrop tokens to the most active community members on Discord, for example).
3.2 Managing your Treasury
We also suggest using Llama, an easy tool that helps DeFi protocols, DAOs, and Social Token communities manage their treasuries, as you'll have to make payments, Financial reporting, and Asset allocation.
3.3 Generate multiple income streams
Treasury management is an essential tool for aligning and incentivizing stakeholders to work for DAOs. Competition for talented contributions is fierce, so it's vital to ensure communities are well-capitalized regardless of market conditions. DAOs & communities ought to generate multiple income streams that can cover operating expenses and make sure to attract the best talents. An option for generating multiple income streams is yield farming. This is when you lend out a cryptocurrency and earn interest in it. It serves as an investment.
 
4/ Create governance mechanisms for your community using Snapshot
One of the main advantages of creating Social Tokens is to give your community voting power. By doing so, they get ownership throughout the project. The easiest way to give voting power to your community is to set up a Snapshot for governance mechanisms. Snapshot is an off-chain gasless multi-governance client with easy to verify and hard to contest results. As mentioned previously, anyone can submit a proposal on Snapshot, and Token holders can then vote for or against the proposal, depending on if they judge it will benefit the project. The more token your hold, the more voting power you have.
 
 
There are other good tools to help you manage your community, such as :
  • SourceCred: SourceCred (in the most basic sense) is a technology that makes the labor of individuals more visible and rewardable as they work together in a project or community. SourceCred uses an algorithm to determine how much value a contribution or contributor added to a project overall. When a contribution is made to a project, SourceCred’s purpose is to "see" that contribution and assign it an amount of "Cred" based on how much value it brought to the project as a whole.
  • Collabland: Collab.Land leverages the power of identity through cryptocurrency to create a social space unique to a specific network of humans. Once you add the bot to your Telegram group or Discord guild, they will manage your people for you. Depending on their token holdings, they will be allowed to join the community. If they sell, the bot boots them.
 
 
Further resources :
 
Coinvise Tutorials
Coinvise Tutorials
/
Setting up Treasury Management & Governance
Setting up Treasury Management & Governance
Setting up Treasury Management & Governance
Setting up Treasury Management & Governance

Setting up Treasury Management & Governance

💛
Now that you have a token, let's setup treasury for your tokens and governance to efficiently run your community autonomously.
 
The purpose of any decentralized community is to capitalize on itself in such a way as not only to ensure its ongoing operations can continue but also to invest in the future growth and success of the community and projects.
As a community leader, you'll have three primary missions: Distribute ownership to community members, manage the Treasury of your community and create governance mechanisms. Luckily, there are handy tools that can help you through this. In this document, we'll explore some of the tools you can use to run your community efficiently and go through important concepts you must know.
1/ Allocating and diversified your Tokens
When creating your Token on a Fixed supply model, you'll have complete power over the distribution of the native Token. It means that you can choose how you want to allocate your tokens. There are many areas where you can allocate funds such as Treasury, allocations for team/community, vested over time for airdrops, bounties or other incentives etc. If you're interested in seeing real-life examples of excellent token allocation, we recommend you read the "$FF Hello World" article from the Forefront community.
The diversification of your tokens is also an important area to focus on when running a community. Indeed, by having the entirety of your Treasury held in your native Token, if the price of your token falls, let's say by 40%, your balance sheet will also shrink by 40%. A priority for many communities' treasuries is to diversify a portion of assets into stablecoins. The stablecoins allocation should at least cover a few years of operating expenses for the Treasury. To deal with these risks, people in the crypto ecosystem have invented the Range Tokens. Range Tokens are financial instruments developed on the UMA derivatives protocol that enable DAOs to diversify their treasuries away from their native tokens without selling them immediately. If you're interested in learning more about this, we suggest you this article and this article.
2/ Distribute ownership to community members.
Once you have created your Token and have a clear use case, the community's founding member(s) can start distributing ownership. To do so, different good practices are often used in DAOs.
1.1 creating a Multisig Wallet with Gnosis.
You can create an account on Gnosis to store and distribute ownership. A multi-signature wallet allows you to define an access/control scheme through multiple signers that need to confirm transactions before executing them. Gnosis Safe is a smart contract wallet that runs on the Ethereum blockchain.
Put simply, a Multisig allows you to share control over the funds with multiple people while preventing them from being lost due to a single point of failure. Instead of having all your Treasury in the hands of one person, by setting up a Multisig, you'll make sure no one can spend the money without the agreement of other persons in the Multisig.
1.2 Create Guilds/Working groups
Creating a Multisig is not the only way to distribute ownership. Another good practice is to develop Guilds or Working Groups that will be in charge of specific missions within your community. By creating these working groups, you'll be able to allocate funds to specifics teams and organize your community more thoughtfully.
3/ Managing your Treasury
A crypto community treasury consists of crypto assets in a wallet owned and operated by the community. It is like a community savings account with assets in crypto (no fiat), typically held in a multisig wallet (not a bank account), managed by the community (not a CFO/CEO), and public (not private). Well-managing the Treasury is not a small task. Whether it's hosting events, funding projects, or even compensating members for their efforts, you'll need to allocate your tokens thoughtfully.
3.1 Incentivize community members
An essential part of managing your Treasury is to allocate your fund to the right contributors, helping them achieve their goals. To do so, one of the most efficient ways is to create Grant programs, where anyone can submit a proposal for a project and, if enough people in the community find it helpful and vote for it, receive the grant. You can also use the Treasury to incentivize new contributors and to create a loyalty scheme (you could Airdrop tokens to the most active community members on Discord, for example).
3.2 Managing your Treasury
We also suggest using Llama, an easy tool that helps DeFi protocols, DAOs, and Social Token communities manage their treasuries, as you'll have to make payments, Financial reporting, and Asset allocation.
3.3 Generate multiple income streams
Treasury management is an essential tool for aligning and incentivizing stakeholders to work for DAOs. Competition for talented contributions is fierce, so it's vital to ensure communities are well-capitalized regardless of market conditions. DAOs & communities ought to generate multiple income streams that can cover operating expenses and make sure to attract the best talents. An option for generating multiple income streams is yield farming. This is when you lend out a cryptocurrency and earn interest in it. It serves as an investment.
 
4/ Create governance mechanisms for your community using Snapshot
One of the main advantages of creating Social Tokens is to give your community voting power. By doing so, they get ownership throughout the project. The easiest way to give voting power to your community is to set up a Snapshot for governance mechanisms. Snapshot is an off-chain gasless multi-governance client with easy to verify and hard to contest results. As mentioned previously, anyone can submit a proposal on Snapshot, and Token holders can then vote for or against the proposal, depending on if they judge it will benefit the project. The more token your hold, the more voting power you have.
 
 
There are other good tools to help you manage your community, such as :
  • SourceCred: SourceCred (in the most basic sense) is a technology that makes the labor of individuals more visible and rewardable as they work together in a project or community. SourceCred uses an algorithm to determine how much value a contribution or contributor added to a project overall. When a contribution is made to a project, SourceCred’s purpose is to "see" that contribution and assign it an amount of "Cred" based on how much value it brought to the project as a whole.
  • Collabland: Collab.Land leverages the power of identity through cryptocurrency to create a social space unique to a specific network of humans. Once you add the bot to your Telegram group or Discord guild, they will manage your people for you. Depending on their token holdings, they will be allowed to join the community. If they sell, the bot boots them.
 
 
Further resources :
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