Digital Asset Treasuries Shift Beyond HODLing as Firms Search for a Competitive Edge

Key Takeaways

• The archetypal digital plus treasury (DAT) model, pioneered by MicroStrategy, involves buying and holding cryptocurrencies.

• But successful a competitory landscape, modern crypto treasury companies are chasing higher returns.

• Strategies see DeFi output farming, progressive token management, and hedging to support against marketplace downturns.

Ever since Michael Saylor steered MicroStrategy (now known arsenic Strategy) toward its archetypal Bitcoin purchases successful 2020, the basal integer plus treasury (DAT) look has remained unchanged: rise money, bargain crypto, and HODL.

But successful an progressively crowded marketplace, a newer procreation of DAT firms is looking beyond passive buy-and-hold strategies. 

More than 5 years aft Saylor pioneered the concept, implicit a 100 nationalist companies collectively hold more than a cardinal Bitcoins.

While Strategy maintains the largest treasury and a important pb implicit its rivals, a harvest of copycats has inactive managed to accumulate steadfast stockpiles. But arsenic the marketplace has expanded, caller entries progressively request to differentiate themselves.

For Ethereum treasuries, staking is the bare minimum required to guarantee assets turn and aren’t devalued by ETH inflation. Seeking to heighten yield, immoderate firms person deployed their treasury assets in decentralized concern (DeFi) protocols.

For instance, GameSquare has described a “dynamic treasury engine” built by Dialectic that incorporates stablecoin and NFT yields to amplify returns. Meanwhile, SharpLink said it plans to allocate $200 cardinal worthy of ETH to ether.fi and EigenCloud.

Chanelling funds into DeFi is paying disconnected for Ethereum treasuries..

In August, GameSquare reported an annualized output of 7.84%—notably higher than the 3–4% achievable done validator staking and good supra the rates offered by third-party staking services.

As the assemblage evolves, palmy output farming strategies could assistance ETH treasury farms basal retired and pull investors. But they inevitably impact risks that don’t use to vanilla HODLing.

Steering wide of DeFi altogether, different companies person developed strategies that question to structure treasuries from losses successful a carnivore market.

In an interrogation with CCN, Republic Technologies CEO Daniel Liu said the institution has aggregate tools successful its arsenal to maximize returns, careless of marketplace conditions.

“Digital assets are incredibly volatile, and erstwhile you enactment that into the nationalist markets, it comes with mode much risks than immoderate accepted institution would face,” helium observed, concluding that it is prudent for DATs to hedge against downturns.