The foundation manages operational treasury — the funds needed to run the protocol day-to-day, pay contributors, and fund strategic initiatives. It operates under legal obligations and fiduciary standards, with a defined mandate from the community. The DAO governs the community treasury — the larger allocation reserved for ecosystem growth, grants, and long-term development.

The separation exists because DAOs are structurally bad at operational execution. Voting on every expense, hire, and vendor contract creates decision fatigue and delays that make the protocol uncompetitive. The foundation handles execution; the DAO sets strategic direction and approves major allocations. The key governance challenge is ensuring the foundation remains accountable to the DAO without becoming paralyzed by it.