When reviewing project materials, you may have come across an introduction like this: the treasury value is so high that it can support the team continuing development for many years. That number is certainly worth looking at, but in my research, it’s only the starting point. What truly determines whether a project has budgetary room, is whether these assets can be withdrawn when money needs to be spent—and at what cost they can be converted into cash for paying bills.

If you break the treasury down first, the conclusion is often not that simple. Some projects hold large amounts of stable assets, where purchasing power is relatively easy to estimate; others have treasuries mainly made up of their own tokens. The latter may look especially well-funded when prices rise, but if the team wants to pay for development, audits, and operations, they usually need to sell first. The book value only indicates that someone has recently transacted at that price; it doesn’t mean the entire asset can be liquidated at the same price. The larger the amount and the more limited the market’s ability to absorb it, the greater the gap between the displayed value and the actual available funds may be.

I will also figure out who can actually move this money. The treasury may be controlled by a multi-signature setup, or it may be locked by contract terms, governance votes, or pre-set budget constraints. Some assets, although included in the totals, are already designated for ecosystem incentives, liquidity support, or long-term allocations, and cannot be temporarily used to deal with other issues. These restrictions are not necessarily risks—multi-sig and publicly disclosed budgets can even constrain the team from spending at will. But if the permissions, unlock conditions, and where the budget goes are unclear, readers cannot determine how much of the so-called reserves is truly available and re-deployable.

Going further down, I will look at available assets together with the spending pace. A treasury is like a tank: capacity matters, and so does the rate at which water flows out. How many months of payroll and basic expenses can stable assets cover? Does the project rely long-term on selling its own tokens to fund operations? When will the next round of major incentives or development investments occur? These questions are closer to the team’s real runway than simply looking at the total amount.

Therefore, I won’t automatically raise my rating just because the treasury number is large. My decision boundaries are clear: the more robust the asset composition is, the more transparent the control rules are, and the smaller the market impact of liquidation, the more reliable the safety cushion provided by the treasury will be. If most of the value comes from the project’s own tokens, and the permissions lack explanation, I will significantly discount the displayed total. Only if stable assets increase, the budget becomes public, and revenue can cover more expenses will I reassess upward in the future.

The next time you see “funds are sufficient,” it may help to first look for three things: the treasury asset breakdown, the control and unlock rules, and the most recent spending and income. If you’re researching a particular project, you can comment on what its treasury is mainly composed of, and also the piece of information you can’t find—I’ll tell you how that gap affects the risk assessment.