Editing Treasury

A treasury is a type of internally owned account in a [[DAO]] which holds cash currency. Treasuries can be built for many different purposes, and so will have different specifications depending on their intent. 

[[DAO Governance Framework|DGF]] offers four different categories of treasury designs, using the different native mechanisms of the platform. Broadly, treasuries can be generated quickly by investors who directly deposit cash in an internal account (e.g., ICOs) or by issuing [[BOND tokens]] sold at market to buid a treasury. Treasuries can alternatively be generated in a slower, more stable fashion, by siphoning a fraction of the fees the DAO earns from [[DAO Governance Framework#DGF workflow|normal business]], or they can be generated by  [[Forum reference mechanisms|siphoning]] REP tokens from normal business.

== Overview ==
Treasuries are sometimes necessary for banking, insurance, or stable coins; development funds; or holdings of investments. 

Despite being necessary, a treasury nevertheless always signifies a weakness in a DAO. Relying on a treasury is suboptimal to relying on business inertia where cashflows are healthy for two major reasons. First, a treasury incurs [https://www.tandfonline.com/doi/abs/10.1080/00036848800000052?journalCode=raec20 holding costs].<ref>Any liquid cash is subject to the holding costs that result from loss of opportunity, for instance from the interest or profit that could have been earned by depositing or investing.</ref> Second, any cash held by a DAO becomes a target of competition between members, which destabilizes the group, eroding their solidarity. This is because cash money is fungible and therefore tradeable instantly and therefore creates a zero-sum competitive business environment. (Compare this against [[reputation]], which is a positive-sum entity which incentivizes collaboration.)

== Notes and references ==