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.