Most decentralized autonomous organizations remain heavily exposed to their own governance tokens, according to new research from market maker GSR, which found that DAOs hold around 70% of their treasury assets in native tokens on average. GSR's report argues this concentration creates a structural weak point: when a DAO's own token price falls, the treasury that's supposed to fund operations and grants shrinks in tandem, forcing the organization to sell into weakness at exactly the wrong time.
That circularity is what GSR describes as a negative feedback loop — a declining token price erodes treasury value, which then pressures the DAO to liquidate more of its own token to cover expenses, adding further sell pressure and pushing the price down again.
A Known Risk That Hasn't Gone Away
The finding echoes broader industry data on the same problem: separate treasury surveys have put native governance tokens at roughly two-thirds of total DAO treasury holdings, with a meaningful share of organizations keeping more than half their reserves in a single, often illiquid, asset. Stablecoins and diversified holdings, by contrast, typically make up less than a fifth of the average DAO's balance sheet, leaving many organizations with limited runway that isn't tied to their own token's performance.
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Why It Matters Now
GSR's research, produced with input from the firm's trading desk, comes as more crypto organizations — from protocol DAOs to publicly traded digital-asset treasury companies — face pressure to professionalize how they manage reserves after a volatile few years. The report's core recommendation is straightforward but often ignored in practice: diversify treasury holdings into stablecoins and non-native assets before a downturn forces the issue, rather than after.
For DAOs that have built years of operations around token-heavy treasuries, unwinding that concentration without spooking token holders or triggering the exact sell-off they're trying to avoid remains the harder problem GSR's report doesn't fully resolve.
