A DAO should not start buybacks merely because it is profitable. It should start only after proving the capital is truly excess. @sparkfinance turns this into a live system: Returns → liabilities → operating runway → risk capital → buybacks Here is a framework every DAO can use ↓ ➢ The original DeFi treasury framework In 2021, @hasufl and @MonetSupply proposed a new mental model for DeFi treasuries. Spark puts three of its ideas into practice: • Exclude SPK from treasury assets • Recognize depositor liabilities and set risk-capital requirements • Reserve operating and risk buffers before buybacks ➢ Six questions before any DAO buyback Before any DAO buyback, ask: • Gross or net revenue? • Profit after opex? • Own token counted as treasury? • Unpaid liabilities? • Operating and risk reserves? • Based on accounting profit—or capital left after all required reserves? ➢ Gross returns are not protocol profit Spark Liquidity Layer projects $88.7M in yearly gross returns. After ~$80.4M in capital costs to Sky and Savings V2 depositors, projected net return is $8.3M. For treasury decisions, net return—not gross return—is the relevant figure. ➢ Profit is not yet buyback capacity Spark projects $19.1M in yearly net returns. After the current $14.4M opex override, projected surplus is $4.7M. Hasu's Rule 2: decide whether to retain, reinvest or distribute that surplus. It is not automatically excess capital. ➢ Why SPK is not treasury Spark's net treasury calculation does not count SPK. Hasu's Rule 4: treasury-held native tokens resemble authorized-but-unissued shares, not cash. Turning them into spending power requires selling into the market, creating price impact. ➢ Recognizing liabilities Spark deducts ~$6.7M in yield owed to Savings V2 depositors from treasury. This reflects part of Hasu's Rule 6: money owed to users is a protocol liability—not available treasury. ➢ Operating and risk reserves come before payouts Hasu's Rule 5: hold enough non-native assets to survive a 2–4 year bear market. Rule 6: understand and hedge liabilities specific to the protocol. For a lender, reserves should cover operating costs and potential position losses before payouts. Spark turns that principle into a measurable threshold. RRC is a capital requirement for the risk of Spark's positions—not a realized loss. • Opex: $14.4M override + $1M backstop = $15.4M • Risk: 90-day peak RRC ÷ 90% + $1M = $46.99M The higher value sets the current buyback threshold: $46.99M. ➢ Only excess capital funds buybacks Under SAEP-09, Spark compares Proxy USDS with the current $46.99M target each month. Below target → no standard buyback. Above target → 25% of the difference is allocated to standard buybacks. The target changes with opex and RRC. ➢ What Spark has operationalized Spark's answers: Use net returns. Calculate profit after opex. Exclude SPK. Deduct liabilities. Set reserves from opex and RRC. Fund standard buybacks only from excess capital. My role is to make each step transparent, verifiable and continuously monitored. ➢ Sources and methodology Treasury framework: Spark Financials: SAEP-09: Data: Aug 6, 2026. Projections use current methodology and are not investment advice.