Yeah, I’ve come around to this idea of just allocating some percentage of inflation at mint time.
Yes, only members of a collective can vote on referenda that are put to that collective. It does not cut into the granularity of the voting system, it only provides a first-tier filter. The existence of collective-based treasuries doesn’t exclude or remove the existence of the main treasury. If the collective denies your funding request, and you think they are wrong, then you can still go to the main treasury and ask for a vote from all DOT holders.
Not sure how multi-asset support creates these “pitfalls” (that I disagree with). It just provides more flexibility. Multi-asset proposals (particularly stablecoins) is one of the most requested features. Different collectives have different objectives/mandates and will have different treasury allocation strategies. Forcing them to only hold DOT is the pitfall, not allowing multiple assets.