DeFi Treasury

Definition ∞ A DeFi treasury is a collection of digital assets held and managed by a decentralized autonomous organization (DAO) or a DeFi protocol. These treasuries typically store native governance tokens, stablecoins, and other cryptocurrencies, funding protocol operations, development, and community initiatives. Decisions regarding asset allocation and spending are made through on-chain governance mechanisms, where token holders vote on proposals. The purpose is to ensure the long-term sustainability and growth of the decentralized project.
Context ∞ DeFi treasuries are significant entities in the decentralized finance landscape, with their management and size frequently appearing in crypto news. Reports often cover proposals for yield farming strategies or grants for ecosystem development, approved through community votes. A key discussion involves optimizing treasury management for sustainable growth while mitigating market volatility risks. The transparency of these on-chain treasuries offers a new model for organizational finance.