Runway when part of the treasury is tokens
A dollar of tokens is not a dollar of runway. How to haircut, exclude locked balances and stress stablecoins before you divide by burn.
If part of your treasury sits in tokens, the headline balance overstates how long you can operate. A defensible runway figure separates spendable cash from assets that are locked, slow to exit, thinly traded or exposed to a peg breaking, and it says which assumptions drive the answer.
Start from what is actually spendable
Runway is simple arithmetic: resources available to pay bills divided by monthly net burn. The hard part is the numerator. A useful anchor is the IAS 7 definition of cash equivalents: short-term, highly liquid investments readily convertible to known amounts of cash and subject to an insignificant risk of changes in value [1]. Most token holdings fail at least one of those tests, so treat them as a separate, haircut layer rather than as cash.
A practical structure is three tiers. Tier one is fiat and money-market cash. Tier two is liquid assets you could convert within your planning window, including stablecoins and major tokens, each with a haircut. Tier three is anything locked, vesting, staked behind an exit queue, or too illiquid to sell without moving the price. Tier three contributes zero to a strict survival figure, though you may show it separately.
Lockups, vesting and exit queues
Contractual restrictions are already a disclosure item for US GAAP reporters applying ASU 2023-08: for in-scope assets subject to contractual sale restrictions, entities disclose their fair value, the nature and remaining duration of the restriction, and the circumstances that could cause it to lapse [2]. That same schedule is the natural input for runway. A token that unlocks in month 14 does not help a 12-month runway.
Protocol mechanics create delays even without a contract. On Ethereum, staked balances leave through a sweep that processes at most 16 withdrawals per block, about 115,200 a day, so the wait depends on how many validators are queued ahead of you [3]. Model the expected delay for each staked or deposited position, and treat the amount as unavailable until it clears.
Haircuts for liquidity and price
A haircut combines two risks: that the price falls before you sell, and that selling a large block moves the price against you. There is no standard formula. Common approaches take a price-shock percentage per asset plus a slippage estimate based on the size of your sale relative to typical daily trading volume, capped at a maximum. For your own project token, many teams exclude it entirely unless the board approves a sale plan, because selling it signals distress and its market depth is usually thin. Document whichever method you use and apply it consistently.
Stress the stablecoins
Stablecoins are usually the largest liquid line, which makes them the most important to stress. In March 2023, Circle disclosed it could not access $3.3 billion of USDC reserves at Silicon Valley Bank, about 8% of the total; USDC fell to roughly 86 cents at the low, and primary redemptions were not available over the weekend because they depended on US banking hours [4]. Other stablecoins linked to USDC through peg-stability mechanisms also slipped [4]. The peg recovered after the March 12 joint announcement by US authorities [4].
Two lessons follow. Concentration matters: spread stablecoin balances across issuers and keep some fiat in bank accounts. And timing matters: even a temporary depeg can coincide with payroll. A sensible stress case applies a 10 to 15 percent haircut to one issuer's coin for a few weeks, and asks whether payroll and vendor payments still clear.
| Line | Balance | Haircut | Counted |
|---|---|---|---|
| Bank cash | 2,000,000 | 0% | 2,000,000 |
| Stablecoin A | 3,000,000 | 0% base / 15% stress | 3,000,000 / 2,550,000 |
| ETH (liquid) | 1,500,000 | 30% | 1,050,000 |
| Staked ETH in exit queue | 500,000 | excluded until withdrawn | 0 |
| Project token (vesting) | 6,000,000 | excluded | 0 |
- Base liquid resources: 2,000,000 + 3,000,000 + 1,050,000 = 6,050,000
- Monthly net burn (average of last three months): 400,000
- Base runway: 6,050,000 / 400,000 = 15.1 months
- Stress: stablecoin haircut of 450,000 and burn up 10% to 440,000
- Stress runway: 5,600,000 / 440,000 = 12.7 months
- Headline balance of 13,000,000 would have suggested 32.5 months
Burn: be honest about the denominator
Measure burn as net operating outflows, not just expenses. Include payroll, vendors, gas and infrastructure; exclude one-offs only if they really are one-off. Many teams weight recent months more heavily. If revenue is paid in tokens, value it with the same haircuts as treasury holdings, or exclude it from a strict figure.
Where runway meets the financial statements
Runway is management reporting, not a journal entry. But it overlaps with going concern. Under US GAAP, management must evaluate whether it is probable the entity cannot meet obligations as they come due within one year after the financial statements are issued, and its mitigating plans count only if they are probable of being implemented and effective [5]. A runway model that relies on selling locked tokens or a thinly traded project token is weak support for that assessment.
What to do
- Split the treasury into spendable cash, haircut liquid assets and excluded locked or illiquid positions.
- Reuse your contractual-restriction disclosure schedule for unlock dates.
- Model exit or withdrawal delays for every staked or deposited position.
- Stress one stablecoin issuer failing for several weeks, alongside a burn increase.
- Document haircut methods, and get board sign-off before counting the project token.
- Recalculate monthly, and show the base and stress figures side by side.
Sources
- IAS 7 Statement of Cash Flows (IFRS Foundation)
- 6.3 Disclosures About Crypto Assets Within the Scope of ASU 2023-08 (Roadmap: Digital Assets) (Deloitte DART)
- Staking withdrawals (ethereum.org)
- In the Shadow of Bank Runs: Lessons from the Silicon Valley Bank Failure and Its Impact on Stablecoins (Federal Reserve Board (FEDS Notes))
- Key considerations when adopting ASU 2014-15 (Baker Tilly)
General information for finance teams, current as of publication. Not legal, tax or accounting advice.