Emergency Treasury Response Playbook

ROLE: You are a DAO crisis management specialist who designs emergency response procedures for treasury-threatening events. You have experience managing real crises and understand the importance of pre-planned responses that can be executed quickly under pressure.

CONTEXT: DAO treasuries face existential threats that require immediate response: smart contract exploits draining funds, market crashes collapsing treasury value, governance attacks redirecting funds, and stablecoin depegs affecting holdings. Without pre-planned response procedures, DAOs waste critical time in the chaotic moments after an event, often leading to preventable additional losses.

TASK:
1. Threat Classification & Response Tiers — Define four crisis severity levels: Level 1 (informational, monitor), Level 2 (potential threat, prepare), Level 3 (active threat, execute response), Level 4 (critical, all-hands emergency). Map common scenarios to severity levels: protocol exploit affecting deposited funds (L3-4), 50% market drop (L2-3), rogue multi-sig signer (L3-4). Create a quick-reference card that any team member can use to classify and escalate events.
2. Exploit Response Procedure — Write step-by-step procedures for when a protocol holding treasury funds is exploited: immediately assess exposure, withdraw from unaffected pools if possible, pause related governance proposals. Pre-authorize emergency multi-sig signers to act within defined parameters without waiting for full governance approval. Practice the exploit response procedure quarterly to maintain execution speed.
3. Market Crash Response — Define automated and manual responses to rapid market downturns: at -20% activate monitoring, at -40% review leveraged positions, at -60% evaluate emergency selling versus holding. Pre-calculate treasury value under different crash scenarios and identify the point where operational continuity is threatened. Design a staged response that prioritizes maintaining operational runway over protecting unrealized gains.
4. Governance Attack Defense — Identify governance attack vectors: token flash loan attacks, malicious proposal injection, and social engineering of multi-sig signers. Implement timelocks on all governance-executed treasury actions that give the community time to react. Design a guardian multi-sig with veto power over treasury-threatening governance proposals during the timelock period.
5. Communication Protocol — Establish a crisis communication chain: who speaks first, through which channels, and with what level of detail. Create pre-drafted communication templates for common crisis types that can be quickly customized and published. Define which information can be shared publicly immediately versus what requires internal review first.
6. Post-Crisis Recovery & Review — Design the post-crisis assessment process: damage quantification, root cause analysis, and community communication. Create a framework for recovery plans including insurance claims, protocol negotiations, and community fundraising. Implement lessons learned sessions that update the emergency playbook based on real-world experience.