tl;dr: As Decentralized Autonomous Organizations become more widespread, the sector of service providers surrounding them will grow as well. Treasury management as a service.

In the “software eats the world” category, one of the more interesting emerging phenomenon is that of the DAO, the Decentralized Autonomous Organization, the bylaws of which are enforced by the blockchain, and the rules of which are governed by a global network of token holders.

As I wrote in DAO-first startups and Erosion, the capital and formation costs of these entities, not to mention the ongoing operational costs, are orders of magnitude less than traditional, centralized organizations.

As these matures, their nimbleness (if that’s a word) should prove problematic for centralized, incumbent players.

These organizations, however, have many of the same needs as traditional organizations. One of the most notable is that of Treasury Management.

Every organization, big or small, has a “corporate treasury.” It may be as simple as a small bank account and grow in complexity from there, but these are the strategic reserves of the organization and protecting/growing them provides the organism with the means to whether the inevitable winters.

At the outset, since these are self-bootstrapped in a native token, all of their wealth is concentrated in that same native token. So, for example, all of Uniswap’s treasury is in UNI, all of SushiSwap’s is in Sushi, and so on.

Naturally, this centralization on one token stands in direct contradistinction to the ethos of the crypto world. All of the eggs are in one basket.

The question then becomes: what to do about it?

Well, where there’s a need, someone is going to fill it and that’s exactly what this proposal from the Yam Finance team did on the SushiSwap community forum.

Calling the service “DAO House,” they are offering, in return for a small token swap between Yam and Sushi (which is a form of strategic alignment that works really nicely), the Yam team will serve as professional money managers on behalf of the Sushi DAO.

However, all of this will be done within the ethos of Crypto. Yam’s team will never have solitary control over the funds. There will be a multi-sig wallet, and all of the funds will be deployed in a SET Protocol, which is a smart contract based mutual fund creation service where you/anyone can set up a portfolio management/allocation strategy to which others can subscribe for a fee of your choosing.

The “customers,” in this case, Sushi, choose their collective risk preference and allocation preference (risky, moderate, conservative, etc.) and then the managers work in accordance with the majority/consensus.

To me, this type of service, which Llama and a few others also provide, is a wonderful example of a service that is crypto-native, could never (well, almost never) be done by an existing asset management firm, and which is likely to grow at a very significant rate in the years to come.