Interview with CoinFund President: The Digital Asset Treasury (DAT) Boom Has Only Just Begun

Chainfeeds Guide:

Are DATs the trending solution right now, or the next cash machine in cryptocurrency?

Source:

Author:

TechFlow

Opinion:

Christopher Perkins: From a broader perspective, this summer can be called the summer of DATs. 2021 was the summer of DeFi, and DATs made their debut at that time, establishing themselves as a core innovation. Much of the development of DATs has benefited from the gradual opening of regulatory policies. Now, we are seeing the effects of this regulatory unlocking. Although there is indeed a bubble in the market, I believe, as Brian said, that DATs will become an important part of the market structure of the crypto ecosystem. The innovation of DATs is very significant—they are open to the public and also supported by foundation labs. Not all projects can succeed with these innovations, because achieving these goals is indeed very difficult, but we are very active in this field. For DATs to truly work, five key elements are needed: First, the market must be ready for the development of DATs, and if the market is closed for too long, it will affect the importance of timing. Second, the tokens must have strong fundamentals. As we shift from bitcoin to yield-generating assets, the potential of DATs becomes even more attractive. Through staking and restaking, tokens can achieve a natural alignment of underlying value. Third, you need excellent advisors and bankers who know what they are doing; fourth, you need a strong management team and outstanding asset managers who know how to manage these underlying assets and drive returns; and perhaps most importantly, you need a KOL, someone who can tell the story and turn this data into beautiful technological innovation. I believe they will persist. Although the market may undergo a reshuffle, the ultimate winners will be very special projects. We are looking forward to this and believe that we are still in the early stages of DATs development, with many exciting projects brewing in the future. At present, DAT is still in its early stage of development. For example, last week we submitted a letter to the SEC and FASB discussing the issue of LSTs (liquid staking tokens) being classified as intangible assets in accounting treatment—there is still much to be improved in the entire industry. Many DAT projects are just starting to operate now. I see some companies in our portfolio, such as Ethereum, benefiting from these mechanisms. For example, ETHZilla is doing some work in the Ethereum ecosystem, and the development of DAT is still in its early stages. If we take Ethereum as an example, the operation mechanism of ETF is more complex. Investors can choose to invest in ETFs or directly purchase spot assets. However, for many traditional investors, they cannot directly access spot assets because this is beyond their investment mandate. Therefore, they usually turn to ETFs. However, ETFs have a key problem: they cannot generate yield. Due to the daily liquidity restrictions of ETFs, such as a 13-day unlocking window, investors cannot stake directly through ETFs. Although a total return product may emerge in the future, at present, the design of ETFs still cannot provide the yield that investors need. This makes ETFs a relatively inferior product, especially for long-term investors, for whom yield is crucial.