Safety Rails

Safety rails are hardcoded limits in the Treasury smart contract that cannot be bypassed—not even by governance votes. They protect the DAO's assets from rapid drainage in attack scenarios.

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🛡️ Safety Rails Overview

📝 Per-Proposal	📅 Daily	📆 Monthly	🔒 Reserve
Max 10%	Max 5%	Max 20%	Min 15%

🎯 Purpose: Protect against rapid treasury drainage

⚠️ Immutable: Cannot be bypassed, even by governance votes

⏱️ Response Time: Days to weeks, not minutes

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🛡️ The Four Rails

📝 1. Per-Proposal Limit: 10%

Maximum withdrawal per proposal: 10% of treasury value

Treasury Value	Max Single Withdrawal
$1,000,000	$100,000
$10,000,000	$1,000,000
$100,000,000	$10,000,000

Purpose: Prevents a single malicious proposal from draining significant funds.

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📅 2. Daily Limit: 5%

Maximum total withdrawals per day: 5% of treasury value

Treasury Value	Max Daily Outflow
$1,000,000	$50,000
$10,000,000	$500,000
$100,000,000	$5,000,000

Purpose: Limits how quickly funds can be extracted, giving community time to respond.

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📆 3. Monthly Limit: 20%

Maximum total withdrawals per month: 20% of treasury value

Treasury Value	Max Monthly Outflow
$1,000,000	$200,000
$10,000,000	$2,000,000
$100,000,000	$20,000,000

Purpose: Caps sustained withdrawal activity, preserving long-term treasury health.

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🔒 4. Reserve Floor: 15%

Minimum treasury balance: 15% of total value

Treasury Value	Minimum Reserve
$1,000,000	$150,000
$10,000,000	$1,500,000
$100,000,000	$15,000,000

Purpose: Ensures the DAO always has emergency funds available.

🔒 Why Immutable?

⚠️ Attack Scenarios

⏱️ Attack Timeline

📊 Limit Examples

🔄 Edge Cases

⚖️ Trade-offs

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💰 Legitimate Large Expenses

For expenses exceeding single-proposal limits:

Staged Approach

Total need: $3M (30% of $10M treasury)

Month 1: $1M proposal (10% limit)
Month 2: $1M proposal (10% limit)
Month 3: $1M proposal (10% limit)

Total time: 3 months
Total extracted: $3M
Treasury protected throughout

Alternative Structures

Alternative	Use Case
🔐 Escrow arrangements	Large purchases
📊 Milestone-based payments	Long projects
🏦 Third-party financing	Property acquisitions
💼 Operating budget use	Regular expenses

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🔍 Monitoring

Real-time Tracking

// Get current limits
const available = await treasury.getAvailableToWithdraw();
const dailyRemaining = await treasury.getDailyRemaining();
const monthlyRemaining = await treasury.getMonthlyRemaining();
const reserveStatus = await treasury.getReserveStatus();

Alerts

Systems monitor for:

• 📊 Rapid daily limit approach

• 📆 Monthly limit usage >50%

• 🔒 Reserve approaching floor

• ⚠️ Unusual withdrawal patterns

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🔗 Learn More

• 💰 Treasury Management — Treasury overview

• 🔄 Governance Overview — How proposals work

• 📝 Proposal System — Creating treasury proposals

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🔗 Related Pages

TreasuryHow Governance WorksProposals🗳️Overview