CoW DAO Treasury — November 2025 Monthly Report

Treasury
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Summary

November was a constructive month for the CoW DAO Treasury, focused on strengthening liquidity allocation, enhancing risk-adjusted returns, and streamlining treasury structure across Mainnet, Gnosis Chain, and Base. Activity during the month centred on improving the quality of the DAO’s asset mix after Balancer’s incident and the liquidity crunch on Morpho markets, consolidating outdated positions, and deploying capital into more reliable, benchmark-aligned strategies.

Treasury Overview

During the month, the Treasury continued to favour low-risk, liquid, and yield-generating stablecoin allocations across Aave v3, Morpho Blue, sDAI on Gnosis Chain, and Sky Money. ETH-correlated exposure via ETH, WETH, stETH, osETH and idle positions—remains modest, reflecting a conservative risk exposure in current market conditions and a focus on extending the stablecoin runway.

Native-token exposure (COW) stands at $5.27M, held across idle balances and liquidity pools on Uniswap v2, v3, and v4, and continues to be a significant driver of native-token-related volume. EUR stablecoin usage continues to provide currency diversification, with material balances held both idle and in Curve and Aave markets.

Over the month, execution centred on streamlining the treasury allocation by concentrating exposure in fewer protocols, tightening the risk profile, and preserving capital. Given the very unique circumstances of this month, we preferred to prioritize capital preservation over yield with the goal of increasing the portfolio’s average yield in the short to medium term if market conditions allow.

Yield & Benchmark Alignment

ETH-denominated exposures were refined to favour high-quality yield sources, while stablecoin reserves were migrated into strategies that track or exceed their respective benchmarks. Across chains, stablecoin liquidity was consolidated to reduce fragmentation and improve capital efficiency.

Liquidity Deployment

Treasury liquidity on Mainnet, Gnosis Chain and Base was redeployed into new venues to support native on-chain volume on different chains and earn fees on assets that would otherwise remain idle in the treasury.

Asset Allocation & Protocol Distribution

Total assets under management (AUM) amount to $33.10M, of which $27.94M are actively managed under the Core Treasury mandate. The remaining $5.16M constitutes the Sky Money Defence Reserve, which is tracked separately.

Asset Allocation

The Treasury’s portfolio remains predominantly allocated to stablecoins and native-token exposure, with utilisation across Aave v3, Morpho Blue, Sky Money, sDAI on Gnosis Chain, Curve pools, and ETH-correlated assets.

Category Allocation

  • USD Stablecoins: $16.22M (58.07%)
  • Native Token (COW): $5.27M (18.85%)
  • EUR Stablecoins: $4.45M (15.94%)
  • ETH-Correlated Assets: $2.00M (7.14%)

USD-denominated assets continue to anchor the Treasury’s liquidity profile, while COW exposure remains a meaningful component of long-term strategic alignment.

Protocol Distribution & Allocation

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Across the actively managed portion of the Treasury, deployment remains broadly diversified across lending markets, stablecoin yield strategies, and liquidity provisioning. No single protocol exceeds 30% of total exposure, and the distribution remains consistent with CoW DAO’s risk-balanced mandate.

  • Idle Funds: 39.41%
  • Aave v3: 27.80%
  • Morpho: 13.89%
  • sDAI on Gnosis Chain: 8.04%
  • Lido: 3.03%
  • Stakewise: 0.89%
  • Sky Money: 2.24%
  • Curve: 1.98%
  • Uniswap v4: 1.16%
  • Uniswap v3: 0.89%
  • Stakewise: 0.89%
  • Uniswap v2: 0.67%

The Treasury therefore maintains a broadly diversified distribution, with stablecoin yield strategies representing the bulk of deployed capital.

Core Treasury Team — Updated kpk Fee Structure (Effective 1 November 2025)

As part of the ongoing evolution of CoW DAO’s Treasury framework, the Core Treasury Team and kpk implemented a new fee structure that replaces the previous AUM-based model with a simpler, more transparent, and performance-aligned system.

This new commercial structure intends to provide better incentive alignment and align compensation to the new scope aligned by the Core Treasury Team (CIP-19).

At a Glance

  • Fixed Monthly Fee:
    $6,500, capped and independent of AUM.
    Covers strategic treasury management, risk management and monitoring, asset allocation oversight, automation of processes through ZRM, and reporting.

  • Performance Fee (Only on Alpha):
    30% on net outperformance above objective benchmarks, paid only when returns exceed:

    • USD stables: Sky Savings Rate (SSR)
    • ETH: stETH rate
    • EUR stables: Aave EURC rate
    • Other tokens: stETH rate

What This Changes

  • Removes AUM-indexed fee inflation
  • Improves predictability by converting USD-denominated fixed costs, as both Fees are now paid in USDC rather than a mix of CoW and DAI.
  • Ensures performance fees are paid only for validated, benchmark-adjusted alpha
  • Reflects the Treasury’s conservative, capital-preserving mandate
  • Enhances transparency and simplifies reporting

This model strengthens the alignment between CoW DAO and kpk while supporting the DAO’s long-term financial sustainability.

3 Likes
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Thank you for the updates.

Would it be possible to share historical performance data relative to the selected benchmarks?

My main concern is whether the active treasury management approach truly justifies the additional risk and cost.

Since your incentive structure rewards the pursuit of higher yield opportunities through performance fees, while the DAO bears the financial risk, this creates an imbalance that is concerning.

I am trying to assess whether a more passive approach, such as allocating treasury assets to stETH and sUSDS, could potentially offer better risk-adjusted returns with less operational risk and costs.

1 Like
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Thanks for your questions — we appreciate the opportunity add more context.

Historical Performance & Benchmarking

First, regarding your request for historical performance: this is fully trackable at reports.kpk.io, where we publish portfolio performance and allocation breakdowns, allowing the DAO to continuously assess whether the active approach is providing value above baseline passive alternatives.

On the Shift to Performance-Based Compensation

To clarify: the Core Treasury Team (kpk + core contributors) has been actively managing CoW DAO’s treasury since the formation of the mandate. The update to the compensation model replaced the AUM-based fee plus a performance fee based on yield generated with a fixed monthly retainer plus a performance fee, payable only on validated outperformance relative to objective benchmarks.

In other words, the DAO pays no success fee unless actual excess return is delivered - and that return is measured against the exact same passive strategies you referenced (e.g. stETH and stable savings rates). This was done intentionally to eliminate misaligned incentives and to focus purely on net value creation, in accordance with the Treasury Strategy.

Treasury Strategy: Conservative by Design

The current treasury strategy, as outlined in this forum post, focuses on:

  • Maintaining ~$28M in stablecoins to ensure a two-year operating runway for the DAO.
  • Deploying funds conservatively into low-risk, yield-bearing strategies (across protocols like Aave, Morpho, sDAI, etc.).
  • Diversifying across USD and EUR stablecoins, plus gradual exposure to ETH/BTC once core runway targets are secured.

This approach prioritises capital preservation and liquidity first, then yield. It’s a deliberate design to support the DAO’s long-term sustainability and avoid overexposure to any single protocol, asset, or yield strategy. To execute this strategy, active management is required.

What Active Management Actually Covers

“Active” in this context does not mean yield-maximising at all costs. It means:

  • Real-time monitoring of positions and risks (with automated alerts),
  • Due diligence on all protocols and assets before deploying capital,
  • Rebalancing when conditions shift, benchmarks drift, DAO’s needs change or risk increases (as seen during the Balancer and Morpho events in November).

All of this is part of the fixed scope and done to minimise operational and financial risk — not increase it.

Put differently, the DAO is already benchmarking the active strategy against passive alternatives. A strong discipline is built into the strategy’s structure and its “active” execution.

The treasury’s mandate is to ensure the DAO can meet its funding needs safely and sustainably. That means starting with a clear view of runway requirements, upcoming obligations, and overall risk exposure. Only once those pieces are in place do we look at where to allocate capital, selecting yield opportunities that meet our security and diversification criteria.

We hope this addresses the questions raised.