Yam Finance Presents “DAO House”

Yam Finance
8 min readMar 3, 2021

We are excited to present DAO House! The First Treasury Management Solution Designed Just for DAOs.

Treasury Management — The Mission Critical Edge

Successful companies invest and effectively deploy capital from the corporate treasury. Likewise, community run Decentralized Autonomous Organizations (DAOs) share a similar imperative.

Explosive Growth Pushes Treasury Management To Center Stage

DAOs now hold substantial amounts of wealth. Based on preliminary figures from DeepDAO.io — which only represents a subset of all DAOs — approx ~$1bn is held in DAO treasuries.

For instance according to the DeepDAO ranking site:

  • BarnBridge DAO = ~200M
  • AP13 DAO = ~142M
  • PieDAO = ~81M

DAOs Face Formidable Treasury Challenges

Treasury management is mission critical for DAOs, yet the challenges and complexities are formidable. Since treasury management has so many moving parts every DAO has to navigate a sea of choices.

DAO House solves this dilemma by offering customized treasury management solutions that meet each DAO’s specific needs and investment goals.

DAO House Treasury Management Solution

DAO House provides customized treasury management solutions (called HOUSES), powered by the Set Protocol secure trading infrastructure

DAO House is a turnkey, customizable, on-chain, and actively managed treasury management solution for DAOs. Featuring an active portfolio manager who can respond to changing market conditions quickly — all within guardrails and smart contract restrictions — and all under the full control of the DAO. DAO House was designed by Yam Finance to serve as a DAO cornerstone for future growth and long-term sustainability. DAO House is the first Treasury Management Solution designed just for DAOs.

DAO House — Built on TokenSets Proven Infrastructure

DAO House solutions employ smart contract based TokenSet portfolios developed in collaboration with and powered by Set Protocol. Each DAO House’s customized investment strategy is coded into the TokenSets smart contracts. An active portfolio manager executes all trades within TokenSets’ secure trading UI, and all investment activity and smart contracts are visible via the TokenSets public dashboard.

Three Key Elements, One Elegant Solution

DAO House is the simple and effective solution for managing a DAOs treasury

DAO House combines three key elements into a single elegant solution:

  • Decentralized on-chain governance always remains in full control
  • Professional investment strategies executed by an active portfolio manager
  • Built on TokenSets’ best-of-breed smart contract trading infrastructure

The History and Future of Yam House

A little history is helpful here. Those in the Yam community will remember the project’s original name was Yam DAO Set (YDS), which was originally intended as a project to only serve the needs of the Yam DAO’s treasury. As the project blossomed, it became clear other DAOs could benefit as well. So the DAO House division of Yam was formed to provide Treasury Management Solutions to other DAOs.

In phase 1, Yam launched its own Treasury Management Solution named Yam DAO House — currently fully operational. Phase 2, beginning now, will see the roll-out of the DAO House Treasury Management Solution for other DAOs.

Our “Yam DAO House” Logo.

Introducing Yam DAO House — Yam’s Own Treasury Solution

Yam DAO House is the first implementation of the DAO House Treasury Management Solution governed by Yam Finance. It’s a set of customized smart contracts combined with an active portfolio manager, selected via an on-chain vote by the Yam community. The entire solution is completely on-chain, transparent and governed by the Yam DAO. The active portfolio manager operates within guardrails and is held to strict controls, defined actions, and performance reviews. Yet control is maintained at all times by the Yam DAO, who can make any changes, at any time, through voting on proposals that are submitted by the Yam community.

DAO House was developed in collaboration with Tokensets, which functions as the infrastructure supporting the Yam DAO House Treasury Management Solution.

Here’s how it all breaks down:

  • Set Protocol: Battle-tested asset management tools and infrastructure
  • TokenSets: Technology by Set Protocol which consists of a ‘Set’ of tokens
  • Yam DAO House: Name of the Yam DAO Treasury Portfolio Set
  • yamHOUSE: The token that represents assets within the YAM DAO House Set

Investments Objective — Balance Growth and Risk

The investment objective of Yam DAO House/yamHOUSE is to achieve long term capital appreciation and minimize risk in order to support growth and development of the Yam Ecosystem. This allows a more dynamic allocation of assets with better risk handling and analysis, and without loss of decentralization. YamHOUSE employs the investment strategy/risk profile of 3 on a 1- 5 scale which was established through on-chain voting by the Yam DAO.

The Yam DAO House’s active portfolio manager is Krugman — a top TokenSets trader and long-time Yam community member — who executes all trades within the TokenSets secure trading UI to keep the portfolio balanced and in compliance with the investment strategy which he co-developed and which was ultimately approved by a Yam DAO vote. All investment activity, as well as smart contracts, are visible via the TokenSets/yamHOUSE public dashboard, making it easy for Yam DAO’s community members to monitor investment activity in real-time.

Yam DAO House Private Trading UI and Public Treasury Portfolio

The Trading UI (left) provides access and guardrails to the active manager. The TokenSets website (right) allows the community to track and monitor the investments

Portfolio Manager Can Respond Instantly via Secure Trader UI

The Yam DAO House trading UI provides the active portfolio manager (Krugman) with the ability to respond to market conditions and execute on the pre-defined investment strategy that was approved through Yam community governance. Speed and timing are key advantages over slower, governance heavy processes — yet everything the portfolio manager does is fully governed by the DAO.

Yam DAO Community Can Monitor Investments Easily

The Yam community itself, and anyone else, can visit the TokenSets website (by Set Protocol) to view the YAM DAO House asset holdings performance, the smart contracts, all on-chain transactions, and the movement of tokens — thus assuring full transparency to all.

A Look Inside the yamHOUSE Investment Strategy

The investment objective of yamHOUSE is to achieve long term capital appreciation and minimize risk in order to support growth and development of the Yam Ecosystem. This allows a more dynamic allocation of assets with better risk handling and analysis without loss of decentralization. YamHOUSE employs the investment strategy/risk profile of 3 on a 1- 5 scale which was established through on-chain voting by the Yam DAO.

All investment strategies, thesis, and objects are subject to change via governance process from Yam token holders. Strategies are determined on a scale from 1 to 5 from conservative to aggressive with a targeted beta and correlation.

yamHOUSE will be utilizing different DeFi strategies to minimize risk and maximize returns:

  1. Liquidity Pool Farming — This strategy provides income when assets are provided as liquidity at an Automated Market Maker such as Uniswap.io then staked at a yield farm to gain additional income.
  2. Index Funds — Portfolio will be using other crypto-based indexes with a successful track record and proven strategy. Initial allocation will include the DeFi Pulse Index (DPI) and Cryptoassets Index (CGI).
  3. Yield-Generating Stablecoins — Yielding Stablecoin pools benefit users by socializing gas costs, automating the yield generation and rebalancing process, and automatically shifting capital as opportunities arise.

DAO House is Ready to Build Your House

Yam builds custom DAO Houses for other DAOs, providing guidance every step of the way through a process we call Treasury Management as a Service (TMaaS). TMaaS meets each DAOs unique needs and goals through ongoing treasury management solutions tailor-made for your DAO, from investment strategy, to governance proposals, to long-term portfolio management.

Potential solution sets range from diversifying a DAOs treasury into multiple assets (crypto and traditional), to farming and hedging capabilities using on-chain options, to token swaps with other protocols within the DAO House matrix.

Treasury Management as a Service (TMaaS) is a full service offering including: initial consultation and setup, investment strategy development, risk profiling, technical implementation, deployment of the fully customized DAO House treasury management product, input on skill sets recommended for choosing the active portfolio manager, and ongoing support.

TMaaS Process Flow

DAO House Treasury Management as a Service: Process flow diagram

The DAO House Foundation is Built on a Core Feature Set

Every DAO House is built on a core set of features as defined in the table below. Additional modules and capabilities will be built on top of this foundation.

Scope, fees and implementation time frames are dependent on the DAO’s governance process and other factors. No cost, no commitment upfront consultation is the first step.

Interested DAOs can contact Feddas@yam.finance or discord @feddas for more information.

The name DAO House was inspired from the word Bauhaus (German for “building house”), a movement from 1919 to 1933 famous for its approach to design, aimed at unifying the principles of mass production with individual artistic vision. Inspired by the Bauhaus ethos, DAO House attempts to unify the principles of smart contracts with individual investment vision.

Mechanical Stage Design by Joost Schmidt, 1925

The Bauhaus was influential in the worldwide redesign of everyday buildings that did not hint at any class structure or hierarchy. So too, DAO House philosophically aligns with the flattening of hierarchy and the pursuit of a fair and equitable society through crypto economics.

May your house be secure, sustainable and abundant.