The Future of Treasury Management: Private Proposals, Public Audits

Private proposals and public audits define the future of DAO treasury management. The current model forces a binary choice between opaque, centralized execution and inefficient, fully transparent on-chain voting for every transaction.

Protocols like Llama and Multis demonstrate that private working groups are necessary for speed and competitive deal flow. Public on-chain voting for every signature or swap creates operational paralysis and leaks alpha.

The solution is a cryptographic separation of duties. A private committee executes using tools like Safe{Wallet} with Zodiac modules, while a public verifiable audit trail on-chain, using standards like EIP-7503, ensures final accountability.

Evidence: The $30B+ managed in DAO Safes proves the demand for delegated execution, while incidents like the Euler governance attack show the catastrophic cost of opaque treasury actions.

Execution must be opaque. Public on-chain proposals telegraph strategy to competitors and front-running MEV bots, destroying alpha. Private execution via secure multi-party computation (MPC) or confidential smart contracts is non-negotiable for sophisticated asset management.

Proof must be transparent. The final state change—assets moved, fees paid, yields generated—requires an on-chain, verifiable attestation. This is the immutable audit trail, not the negotiation log. Protocols like Aztec and Fhenix are pioneering this privacy/verifiability split.

This decouples trust. DAO members trust the cryptographic proof of outcome, not the individuals executing it. The model mirrors TradFi's dark pools for execution with blockchain's settlement finality for audit, eliminating the need for blind trust in delegates.

Evidence: Yearn Finance's strategy vaults demonstrate the power of opaque execution with transparent results, though they rely on trusted operators. The next evolution is removing that trust assumption entirely with ZK proofs of correct strategy execution.

Private Deal Flow is a non-negotiable requirement for competitive treasury management. Public proposals on forums like Snapshot create front-running risks and destroy negotiation leverage. Protocols like Llama and Superstate are building private deal rooms where terms are negotiated off-chain before any public on-chain vote.

Public Execution and Audit provides the required transparency. The final, binding transaction—its logic, counterparty, and full terms—executes on a public blockchain. This creates an immutable, verifiable record for any stakeholder or auditor to inspect, moving beyond opaque Excel sheets.

The counter-intuitive insight is that privacy enables better deals, not corruption. A DAO can negotiate a bespoke OTC swap with a market maker or a private token sale without revealing its hand, then prove fair execution after the fact. This mirrors traditional finance's two-step process of private negotiation and public settlement.

Evidence: The growth of on-chain asset management platforms like Karpatkey and Arca validates the demand. These entities manage hundreds of millions in DAO treasury assets, relying on private operational workflows that culminate in transparent, on-chain transactions auditable by tools like Nansen and Dune Analytics.

Private execution is not private governance. The proposal, budget, and final settlement remain fully on-chain. The execution strategy is the only confidential component, protecting competitive edge and preventing front-running, similar to UniswapX's encrypted intents.

Public audits replace real-time transparency. The model shifts scrutiny from process to outcome. A verifiable zero-knowledge proof of execution (e.g., using RISC Zero or =nil;) proves funds were used as authorized, a stronger guarantee than watching a public wallet drain.

This inverts the governance risk profile. Traditional DAO proposals risk public execution failure and value leakage. Private execution with a ZK audit guarantees the authorized outcome occurred, making failure a breach of contract, not a public spectacle.

Evidence: Projects like Aztec and Penumbra use similar private execution for DeFi, proving the technical primitives for verifiable privacy are production-ready. The bottleneck is governance tooling, not cryptography.

Private proposal execution becomes the default. DAOs and protocols like Aave and Uniswap will use Safe{Wallet} with specialized modules to approve and execute complex strategies—like DEX aggregation or yield farming—without broadcasting intent, preventing front-running and reducing governance latency.

Public audit trails are non-negotiable. Every private action generates an immutable, on-chain proof verifiable by any observer. This creates a transparency standard where the process is private, but the outcome and proof of correctness* are public, enforced by tools like Tally and OpenZeppelin Defender.

Counter-intuitively, privacy enables trust. The current model of public voting on every transfer is a security and efficiency liability. The future model isolates sensitive operations while providing cryptographic guarantees, making treasury management both more secure and more agile than traditional corporate finance.

Evidence: The migration is underway. Over $40B in assets are already secured in Safe smart accounts, and platforms like Llama are building dedicated treasury management suites, signaling institutional demand for this hybrid private/public model.