SubDAOs provide a flexible and scalable approach to DAO governance by decentralizing responsibilities into specialized units. This section explores three key use cases where SubDAOs enhance efficiency and autonomy:

  • Treasury Management – Secure and strategic financial oversight.
  • Working Groups – Task-specific governance for operational efficiency.
  • Local Governance – Regional or community-driven governance structures.

Each of these use cases demonstrates the adaptability of SubDAOs in handling complex governance challenges.

Treasury Management SubDAOs

Managing a DAO treasury requires financial expertise, risk management, and security protocols. A Treasury SubDAO enables specialized oversight while ensuring transparency and accountability.

How It Works

  • The parent DAO allocates a portion of its funds to the Treasury SubDAO.
  • Treasury SubDAO handles fund distributions, investments, and operational expenses.
  • It operates under predefined risk parameters set by the parent DAO.

Benefits

  • Improved financial security – Experts handle treasury decisions while maintaining oversight.
  • Efficient budgeting – Treasury allocations are streamlined.
  • Decentralized fund distribution – Reduces reliance on single points of failure.

Example: Yearn Finance’s Treasury SubDAO

  • Yearn uses multi-sig wallets and governance-controlled budgets to distribute funds to contributors and maintain operations.

Working Groups as SubDAOs

Large DAOs often require specialized teams to handle different functions (e.g., development, research, legal, marketing). Working Group SubDAOs provide structure while maintaining decentralized governance.

How It Works

  • The parent DAO creates Working Group SubDAOs to handle specific tasks.
  • These SubDAOs receive budgets, decision-making authority, and clear objectives.
  • They operate semi-autonomously, but report back to the parent DAO.

Benefits

  • Task specialization – Expertise-focused groups improve efficiency.
  • Accountability – Clear mandates prevent governance gridlock.
  • Scalability – The DAO can expand without overloading central governance.

Example: Gitcoin’s Workstream SubDAOs

  • Gitcoin organizes funding, development, and governance into separate workstreams.
  • Each workstream operates with independent budgets and decision-making power.

Local Governance SubDAOs

DAOs with global communities may need localized governance structures to address region-specific needs. Local Governance SubDAOs enable governance at a more granular level while staying aligned with the parent DAO.

How It Works

  • A parent DAO creates SubDAOs for specific regions or language groups.
  • These SubDAOs govern local initiatives, community engagement, and on-the-ground projects.
  • They operate under broad policies but have autonomy in decision-making.

Benefits

  • Increases global participation – Local communities feel empowered.
  • Context-aware decision-making – Local governance understands regional challenges.
  • Better resource allocation – Funds are used effectively in local contexts.

Example: ENS DAO Local Chapters

  • ENS DAO has explored regional governance models to foster local engagement and adoption.

Final Thoughts

SubDAOs provide a powerful framework for specialization and scalability in DAO ecosystems. Whether managing treasuries, coordinating workgroups, or decentralizing governance geographically, SubDAOs enable greater efficiency, autonomy, and adaptability.

By leveraging these use cases, DAOs can evolve into more dynamic, decentralized, and functional organizations while maintaining governance coherence.

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