DAO Dynamics: Treasury and Market Cap Interaction

Ioannis Karakostas () and Konstantinos Pantelidis ()
Additional contact information
Ioannis Karakostas: Department of Accounting and Finance, School of Business Administration, University of Macedonia, 546 36 Thessaloniki, Greece
Konstantinos Pantelidis: Department of Accounting and Finance, School of Business Administration, University of Macedonia, 546 36 Thessaloniki, Greece

JRFM, 2024, vol. 17, issue 5, 1-23

Abstract: This study examines the dynamics between treasury and market capitalization in two Decentralized Autonomous Organization (DAO) projects: OlympusDAO and KlimaDAO. This research examines the relationship between market capitalization and treasuries in these projects using vector autoregression (VAR), Granger causality, and Vector Error Correction models (VECM), incorporating an exogenous variable to account for the comovement of decentralized finance assets. Additionally, a Generalized Autoregressive Conditional Heteroskedasticity (GARCH) model is employed to assess the impact of carbon offset tokens on KlimaDAO’s market capitalization returns’ conditional variance. The findings suggest a connection between market capitalization and treasuries in the analyzed projects, underscoring the importance of the treasury and carbon offset tokens in impacting a DAO’s market capitalization and variance. Additionally, the results suggest significant implications for predictive modeling, highlighting the distinct behaviors observed in OlympusDAO and KlimaDAO. Investors and policymakers can leverage these results to refine investment strategies and adjust treasury allocation strategies to align with market trends. Furthermore, this study addresses the importance of responsible investing, advocating for including sustainable investment assets alongside a foundational framework for informed investment decisions and future studies in the field, offering novel insights into decentralized finance dynamics and tokenized assets’ role within the crypto-asset ecosystem.

Keywords: carbon offset tokens; DeFi; GARCH; VAR; VECM; Granger causality; cointegration; treasury; DAO (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/1911-8074/17/5/179/pdf (application/pdf)
https://www.mdpi.com/1911-8074/17/5/179/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jjrfmx:v:17:y:2024:i:5:p:179-:d:1382578

Access Statistics for this article

JRFM is currently edited by Ms. Chelthy Cheng

More articles in JRFM from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().