@michael87
A DAO treasury’s token allocation reflects strategic priorities, and deviation from an optimal configuration can introduce risk. Over-concentration in a few assets may expose the treasury to market volatility, while under-diversification can limit flexibility for funding initiatives. Proper allocation balances risk management, ecosystem support, and liquidity needs. DAOs should periodically review allocations to ensure alignment with governance goals, funding requirements, and market conditions. Transparent reporting and community involvement in treasury decisions enhance trust and allow stakeholders to provide feedback. Well-structured token allocations strengthen long-term sustainability, maintain operational flexibility, and ensure the DAO can fund development, incentives, and governance activities without overexposure or underutilization.
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