Crypto treasuries look large on paper, but many of them are still not built to generate reliable income. That is the main takeaway from new research by Keyrock, which says the 25 protocols it analyzed hold more than $5.6 billion in combined treasury assets.
The bigger point is not the size of those treasuries. It is how they are managed. Keyrock argues that most of this capital is still sitting in native governance tokens and producing very little recurring income, leaving protocols more exposed during downturns.
Crypto treasuries are big, but not very productive
Keyrock says roughly 80% of aggregate treasury value in its dataset sits in native tokens, while stablecoins make up only a small part of holdings. It also says the median protocol allocates only about 7% of treasury assets to yield-generating positions.
In simple terms, many crypto treasuries are rich in assets but poor in cash flow. They may look healthy during bull markets, but they are not set up to produce steady income for salaries, grants, and long-term development.
Why this becomes a problem in downturns
Keyrock says native-token-heavy treasuries become vulnerable when markets weaken. In its analysis, protocol treasuries spent more than half of the observed period more than 50% below previous highs, with some drawdowns reaching nearly 80% from peak value.
That creates what Keyrock calls a procyclical funding structure. Treasury values expand when markets are strong and shrink when operational capital is most needed. In other words, many protocols are still funding themselves with a balance sheet that rises and falls alongside the price of their own token.
The real weakness is not size, but usable liquidity
Keyrock’s point is that treasury resilience depends less on headline valuation and more on reliable, usable liquidity. A large treasury does not help much if most of it is volatile, hard to deploy, or not producing any income.
Keyrock says the treasury tools already exist
The report argues that passive treasury management is no longer caused by a lack of infrastructure. Keyrock points to a mature toolkit that already includes onchain lending markets, yield vaults, liquid staking, tokenized real-world assets, and OTC derivatives and options markets.
It specifically names platforms such as Aave, Morpho, Compound, and Lido as multi-billion-dollar-scale infrastructure providers, and also highlights ERC-4626 vault standards as a way to move capital across strategies more efficiently.
The message is clear: the infrastructure for more professional treasury management is already here. What is missing is broader adoption of those tools by crypto-native organizations.
The income gap is larger than it looks
One of the strongest numbers in the report is the comparison between current and potential income. Keyrock says the 25 treasuries it studied currently generate only about $6.6 million in annual income.
But if those same treasuries increased yield-bearing allocations to 30% of assets and deployed them at a conservative 5% yield, aggregate annual income would rise to about $84.7 million. That would be roughly a 13x increase in recurring funding capacity, according to Keyrock’s model.
That is the core treasury argument here: protocols may not need to sell large amounts of governance tokens to build sustainability if they manage reserves more actively.
What Keyrock thinks the next phase looks like
Keyrock says crypto-native organizations are evolving from early-stage experiments into longer-lived economic institutions. As that happens, treasury management stops being a background function and becomes a core strategic task.
The firm argues that the next generation of protocols will be defined less by how much capital they hold and more by how effectively they deploy it. The winners, in this view, will be the treasuries that enter downturns with diversified buffers and recurring income streams rather than just a large paper balance.
Why it matters for crypto
- Keyrock is making a strong case that many protocol treasuries are still managed too passively despite having large asset bases.
- The research suggests billions of dollars in crypto treasury capital are not being used to create stable recurring income.
- The report reinforces a bigger trend: treasury management is becoming a serious strategic function for DAOs and protocols, not just an accounting exercise.
- If more protocols adopt yield, RWA, staking, and hedging tools, treasury resilience could improve without relying as heavily on token sales.
What to watch next
- Whether more protocols publicly increase treasury allocations to yield-bearing strategies.
- How quickly tokenized RWAs and vault standards become common tools in DAO treasury management.
- Whether treasury managers become more willing to use derivatives and options for volatility management rather than just passive holding.
- If recurring treasury income becomes a clearer benchmark for protocol quality in the next market cycle. This is an inference based on Keyrock’s framing of sustainable treasury frameworks.