# Why Ribbon Treasury?

As noted in Hasu’s [“A New Mental Model for Defi Treasuries”](https://uncommoncore.co/a-new-mental-model-for-defi-treasuries/), many DAO treasuries consist primarily of their own native token, which should not/cannot be considered as a real treasury. Ribbon Treasury allows DAOs to generate income on their native tokens and build a healthy diversified portfolio of assets.

We think this makes it a perfect product for DAO treasuries for multiple reasons:

1. DAOs who are sitting on hundreds of millions of dollars of their own native token often have **no way to generate yield on them**. Covered calls unlocks significantly higher income generation on those assets;
2. Instead of selling tokens on the open market to **diversify the treasury**, DAOs could sell covered calls on their native asset and collect the premiums in stables;
3. DAOs are **well suited to sell upside volatility in their own native token** in exchange for cash today. In the case that the token is flat or down, the DAO would have collected premiums for free. In the case that the token goes up significantly, the DAO would have given up some of that upside — which is totally reasonable risk-reward for a DAO that already owns significant amounts of the native token.

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