Digital assets treasuries (DATs) could strengthen DeFi in the long term

Decentralizing finance is the crypto promise and digital assets treasuries (DATs) can play a crucial role in its fulfillment!

We've seen Strategy (formally Microstrategy) step into the industry and create a movement that will change how companies handle capital forever.

A lot of people do not fully understand what being a digital asset treasury means. Some think of it to be speculative buying of whatever is popular, to merely follow a trend, but it is more than that.

Surely, there are a number of companies that will get it wrong, but others will be contributing to reshape the investment scene.

Each time a company buys a digital asset for treasury holding, it's a statement of another moving piece of a bigger investment strategy to make a profit, to build a sustainable income source!

Every one of these companies are chasing after revenue and digital assets offer the best return on investment (ROI).

DDC Enterprise, which, right now, holds 1,083 BTC, has seen its shares return 119% since adopting Bitcoin for treasury. The value of the company's bitcoin stack currently exceeds the company's market capitalization.

Theoretically, this means that DDC shares are undervalued as the company holds direct exposure to an asset with significant upside.

But this article isn't a DDC shares shill, I simply deemed it necessary to highlight a different company than Strategy to get the message across.

DATs and DeFi

Digital assets treasuries (DATs) can be a threat to things like decentralization when significant protocol governance assets are in the hands of a few, but they can also be a source of strength for DeFi — provided the overall numbers are growing.

The reason for this is simple.

When you have a bunch of companies actively hunting for assets to stack for new income generation, you earn exposure to capital that's flowing in to build stability and growth, building steadily and sustainably into profitability.

It's different from greedy market makers who will crush you to make profits for themselves in the short and long term.

It's different from DeFi yield farmers that will farm tokens and dumb for realized profits immediately.

The capital that DeFi protocols attract from digital assets treasuries is involved in a game where there's an understanding that ensuring stability of the market/industry being invested in, is crucial for securing ROIs that are impressive enough to make the news and push companies new layers of reputation across the investment world.

Digital assets treasuries, especially when focused on growing stacks count than short-term gains, could strengthen DeFi and promote mass adoption.

Also, considering that digital assets offer low cost access to income generation, DATs will grow into several hundreds, betting on several DeFi assets.

Posted Using INLEO