Shaping the Future of Fixed Income in DeFi

Governance is the cornerstone of decentralization. It is the mechanism that ensures protocols evolve transparently, sustainably, and in line with the values of their communities.

Today, we are introducing Treehouse DAO, the decentralized governance body of the Treehouse Protocol. Through Treehouse DAO, decisions about protocol parameters, strategies, treasury management, and more, are placed directly into the hands of TREE and Treehouse NFT holders. 

This community-driven process provides aligned stakeholders with a channel to express their stance, ensuring that protocol evolution reflects the community’s collective perspective, turning governance into a shared responsibility.

Why Governance Matters

Treehouse is building the fixed income layer of DeFi. For this layer to endure, its foundations must be guided by those who participate in it.

Traditional fixed income markets rely on centralized institutions and opaque committees. In contrast, Treehouse DAO makes protocol design, rate-setting, and incentive structures open to discussion and collective approval. 

By distributing decision-making power, governance ensures that Treehouse reflects the priorities of its community while aligning incentives between users, contributors, and stakeholders.

Treehouse Improvement Proposals (TIPs)

The framework for decision-making within Treehouse DAO is the Treehouse Improvement Proposal (TIP). Each TIP outlines a suggested change or initiative for the protocol and serves as the single source of truth for governance.

Community members draft TIPs and post them on the Governance Forum, where discussions refine and improve the proposal. Once ready, TIPs are escalated to Snapshot for a formal vote. If approved, they are implemented and recorded as part of Treehouse’s governance history.

This process ensures that governance is not just reactive, but thoughtful, methodical, and collaborative.

TIP 1: Establishing Treehouse DAO

The first proposal, TIP 1, sets out the vision, structure, and administrative processes of Treehouse DAO itself.

TIP 1 establishes:

  • The guiding principles of Treehouse governance
  • The role of veTREE in voting power, and its proposed denomination
  • The structured process for how proposals move from discussion to execution

TIP 1 is about more than procedure. It is the framework that empowers the community to shape every future decision.

Explore TIP 1: Establishing Treehouse DAO and its Guiding Frameworks

Voting Power with veTREE

Following TIP 1, at the heart of Treehouse governance is veTREE, a model that determines voting power. veTREE is designed to balance influence across the community, giving weight to large contributors while ensuring smaller voices cannot be drowned out.

You can acquire veTREE in four ways:

Your holdings across categories (TREE, NFTs, Pre-Deposit Vaults, Gaia Vested Claim) are each converted into a TREE-equivalent amount. Your final voting weight is determined by summing the square root of each category’s TREE-equivalent amount.

This square-root mechanism ensures inclusivity. Larger holders retain greater influence, but their marginal power diminishes as holdings increase. Smaller holders, when combined, command a meaningful share of the vote.

For example:

  • Under a traditional 1-for-1 system, smaller holders might collectively hold only 4.93% of the vote.
  • Under square-root voting, that share rises to 17.47%,  more than a threefold increase.

This design reflects our commitment to transparency and fairness in governance.

For a full breakdown of voting power, refer to our Voting Mechanics documentation.

From Proposal to Execution

Treehouse governance follows a structured and transparent process:

  1. Discussion: Community members draft and share TIPs on the Governance Forum for feedback.
  2. Escalation: Once a TIP is ready, Treehouse DAO admins escalate it to Snapshot for formal voting.
  3. Voting: Voting begins 24 hours after creation and remains open for 72 hours. All veTREE holders may participate.
  4. Execution: Proposals passing with a simple majority (>50% of votes cast) are executed by the Treehouse team.

This flow ensures that every change passes through open discussion, collective review, and transparent decision-making.

For the full governance process, from initiation to execution, explore our Governance Process documentation.

Scope of Governance

Treehouse DAO is designed to gradually take on more responsibility for protocol management and community initiatives. While the scope may evolve, some of the areas the DAO may govern include:

  • Approving or removing Panelists who participate in Treehouse-operated DOR consensus mechanisms
  • Adjusting the minimum veTREE required for governance participation
  • Deciding on disbursements of funds from the DAO treasury
  • Setting fees to be received by the DAO for its services
  • Establishing quorum requirements for governance votes

These serve as examples of the types of decisions that fall under community jurisdiction. As Treehouse grows, the DAO’s mandate will expand to cover additional areas of protocol design, incentives, and treasury strategy.

Looking Ahead

Treehouse DAO is more than a governance mechanism. It is the embodiment of our belief that fixed income in DeFi should be built for, and alongside, the community.

With TIP 1, we begin by establishing the framework itself. Every proposal that follows will rest on this foundation, as the forest learns to govern itself.

We invite you to join the discussion, review proposals, and make your voice heard. The forest is strongest when every tree plays its part.

Explore the Governance Forum.

Frequently Asked Questions (FAQs)

Q: What is Treehouse DAO?
A: Treehouse DAO is the decentralized governance body of the Treehouse Protocol. 

Q: Why does Treehouse need governance?
A: Governance ensures that Treehouse evolves transparently, sustainably, and in alignment with its community.

Q: What are TIPs?
A: TIP stands for Treehouse Improvement Proposal. Each TIP outlines a proposed change or initiative for the protocol. 

Q: What is veTREE?
A: veTREE is the metric used to calculate voting power in Treehouse DAO.

Q: How do I get veTREE?
A: You can acquire veTREE in four ways:

  • Holding TREE in your wallet (ETH)
  • Holding Treehouse NFTs (1 NFT = 10,000 TREE equivalent)
  • Having TREE deposited in Pre-Deposit Vaults
  • Participating in the Gaia Vested Claim program

Each of these holdings is converted into a TREE-equivalent amount. The square root of each category’s amount is calculated, and your final voting power is the sum of these values.

Q: Why use square-root voting?
A: Square-root voting prevents governance from being dominated by whales. While larger holders retain influence, their marginal voting power decreases as holdings increase. This ensures that smaller holders, when combined, can meaningfully shape decisions.

Q: Who can participate in governance?
A: Any holder of veTREE (derived from TREE, Treehouse NFTs, Pre-Deposit Vaults, or the vested program) can vote on proposals. Anyone in the community can also participate in discussions on the Governance Forum.

Q: Do I need to hold TREE on a specific chain to participate?
A: Voting power is aggregated across TREE holdings in wallets, Treehouse NFTs, Pre-Deposit Vaults, Vested Claim program on Ethereum mainnet. 

Q: Does TREE held on other chains, like BNB Chain, count toward my voting power?
A: No. At this stage, only TREE held on Ethereum mainnet, along with Treehouse NFTs, Pre-Deposit Vault balances, and vested airdrop allocations, is included in veTREE voting power calculations.

Q: Where do proposals and discussions take place?
A: Discussions and drafts happen at the Governance Forum. Once ready, proposals are escalated to Snapshot for formal voting.

Q: Will governance scope expand in the future?
A: Yes. As Treehouse grows, DAO authority may extend to ecosystem grants, partnerships, protocol strategy, and the expansion of fixed income primitives across chains.

Q: Can I propose something myself?
A: Yes. Any community member can draft and submit a TIP to the Governance Forum. The community can then review, refine, and escalate it if it gains support.

Q: Are governance discussions public?
A: Yes. The forum is open to everyone, and proposals are visible to the entire community. This ensures transparency at every stage.

Q: What happens if I acquire more TREE or NFTs during a vote?
A: Voting power (veTREE) is fixed at the snapshot taken when the proposal is created. Any assets acquired afterward do not count toward that vote.

Q: What happens after a proposal passes?
A: The Treehouse team executes the approved decision. Implementation details may vary depending on the proposal’s scope but all outcomes are carried out transparently.

Q: What happens if a proposal fails?
A: Failed proposals are not implemented but can be revised and resubmitted if the proposer wishes.

Q: Do admins have special voting rights?
A: No. Admins facilitate the governance process (moving TIPs from forum to Snapshot) but hold no special voting privileges. Voting power is determined solely by veTREE.

Q: Is governance mandatory for participants?
A: No. Participation is voluntary, but active engagement ensures that the protocol reflects the will of its community.

About Treehouse 🌳

Treehouse, a digital assets infrastructure firm and the decentralized arm of the parent company Treehouse Labs, is at the forefront of revolutionizing the decentralized fixed income market. Treehouse Protocol introduces innovative fixed income products and primitives across chains through tAssets, liquid staking tokens that empowers its users to participate in the convergence of on-chain interest rates while retaining the flexibility to engage in DeFi activities. 

Treehouse Protocol is also pioneering the Decentralized Offered Rates (DOR) consensus mechanism for benchmark rate setting, enabling a range of fixed income products and primitives into digital assets. Treehouse is dedicated to creating safer and more predictable return alternatives for both individual investors and institutions.

Website: https://treehouse.finance

X: https://x.com/TreehouseFi

Discord: https://discord.gg/treehousefi