In recent years, DAOs (Decentralized Autonomous Organizations) have been a popular experiment in the crypto world. However, many people have gradually discovered a problem: many DAOs are governed like ‘playing house’—proposals are arbitrary, voter turnout is low, and fund management is chaotic, with the voices of short-term speculators often louder than those of long-term builders.
Behind this is actually a deep contradiction: decentralization pursues openness and freedom, but managing tens of millions or even hundreds of millions of dollars well requires discipline, risk control, and long-termism. And this is precisely what traditional finance, especially banks, is best at.
Recently, a project called Lorenzo Protocol has attracted attention. It does not talk about 'disrupting banks' but rather aims to bring the governance logic and risk control discipline of banks into the world of DAOs through the core of 'bank coins.' This sounds a bit counterintuitive, but upon closer examination, it might be exactly what many DAOs need right now.
Governance Failure: When 'one person one vote' turns into 'one token one vote' chaos.
Most DAO governance is simple: You hold governance tokens, and you have voting rights. This seems fair, but it actually hides big problems:
Speculators voting with their feet: A large number of tokens are in the hands of short-term traders who may have no interest in the project's long-term development and only wish to speculate on prices. Their voting may lead the DAO to make decisions that benefit them in the short term but harm the ecosystem.
Governance Fatigue: Faced with complex and frequent proposals, genuine long-term holders may be too lazy to delve deep, resulting in low voting rates and decisions being controlled by a minority.
Financial Governance Gap: Many DAO treasuries hold vast sums of money but lack a professional financial management framework. How to use the funds? How to control risks? Often, it's left to a few core members to make decisions, raising doubts about transparency and sustainability.
It's like a company where the largest shareholders are retail investors trading stocks daily, and the company's strategy and fund usage have no processes at all; it feels unreliable just to think about it.
Lorenzo's 'Bank-style Governance': Writing discipline into code.
The thinking behind the Lorenzo Protocol is straightforward: If a DAO is to manage significant assets and complex decisions, its governance should operate like a responsible bank.
How does it do this? The core is through its 'bank coin' model, introducing several key mechanisms:
Voting rights are not bought, but 'earned': Your voting weight not only depends on how many tokens you hold but also on your contribution history, lock-up period, and compliance participation. A member who locks tokens for the long term and actively participates in building will have much greater voice than a speculator who just bought in. This directly writes 'long-term interests alignment' into the rules.
Governance Proposal 'Professionalization': Proposals are no longer just a few simple words. Lorenzo encourages and even requires proposals to be accompanied by on-chain data analysis, scenario simulation models, and clear execution thresholds. This forces proposers to do their homework and allows voters to better assess pros and cons, reducing emotional voting.
Install 'automated risk control' treasury for the DAO: this is a very 'bank-like' point. Lorenzo allows DAOs to set up automated financial management rules, such as:
Portfolio Diversification: You can't bet all treasury funds on a single protocol.
Maintain Liquidity Buffers: Just like banks reserve sufficient funds, ensure the DAO always has cash flow to respond to emergencies.
Set Risk Exposure Limits: Investment in any single asset or protocol cannot exceed a certain proportion.
These rules are enforced automatically by smart contracts, making the asset management of the DAO both transparent and robust.
Bank Coin: Not just a voting credential, but a 'governance work permit.'
In Lorenzo's system, bank coin holders are more like 'directors' or 'managers' of a DAO rather than simple voting machines. You need to take responsibility for the protocol's direction, funding strategy, and risk management.
This design effectively transforms governance from a discrete 'voting activity' into a continuous, responsible financial management process. It rewards those who participate continuously and contribute thoughtfully while punishing those who only want to come in and take a quick profit as 'predators.' This is precisely how core stakeholders are evaluated in mature financial institutions.
Facing Reality: Compliance Awareness and Cross-Chain Future.
Lorenzo also has two designs that are very down-to-earth, targeting the practical needs of DAOs in the future:
Compliance Awareness Module: For a DAO to attract institutional funds or collaborate with traditional finance, completely ignoring regulation is unrealistic. Lorenzo allows the DAO to set up a modular governance layer. For example, decisions involving specific jurisdictions can automatically include identity verification or risk disclosure processes, while the core governance of the protocol remains open. This is akin to installing an adjustable valve between 'autonomy' and 'compliance.'
Native Cross-Chain Governance: Future DAO assets will certainly be distributed across multiple chains like Bitcoin, Ethereum, Solana, etc. Lorenzo's governance decisions are designed to propagate and synchronize across chains. This means a strategic decision made through the bank coin can simultaneously impact the DAO's asset deployment across multiple blockchains, truly achieving integrated management rather than each chain acting independently.
Summary: A bridge from 'experimental playground' to 'credible entity.'
The Lorenzo Protocol and its bank coin model essentially answer one question: How does a DAO evolve from an experimental club of individuals into a credible entity capable of taking on serious financial responsibilities?
What it offers is not disruption, but an important integration: combining the rigor of governance, risk management, and long-termism from traditional finance with the transparency, openness, and innovative vitality of decentralization.
This may signify that the development of DAOs has entered a new phase: the pure idealized governance of the 'startup phase' is giving way to the structured governance of the 'building phase.' For those DAOs that are no longer satisfied with managing MEME coins but want to truly manage Bitcoin, Ethereum, and even real-world assets, thinking like a bank may be an essential path.
The concept of bank coins is, therefore, no longer just a speculative target; it is more likely to become the 'governance infrastructure' of the next generation of DAOs. After all, when decentralized organizations manage more and more money and bear greater responsibilities, who wouldn't want their governance to be a bit more 'reliable'?
@Lorenzo Protocol $BANK #LorenzoProtocol
