Considerations for institutional digital-asset treasuries.
A short note on the governance and operational considerations when an institutional treasury moves from custodian-provided yield products to actively managed mandates. Descriptive rather than prescriptive; decisions are made jointly with each client.
01The five-percent conversation
What a corporate treasury gets from a regulated prime broker's yield product is what you would expect: chartered counterparty, segregated custody, T+1 redemption, audited statements. The trade is the broker's funding rate minus a fee. For most corporates with a crypto sleeve, that is rational: the custodian is rated, the board is comfortable, the CFO can answer the audit committee without preamble.
It is also exactly that: the custodian's funding rate. Five percent on USDC is the broker's cost of capital plus a haircut. Not a yield strategy; a cash-management product priced like one.
02What actually changes when you cross the line
The leap from 5% to 20% is not about finding a different yield instrument. It is about choosing which incremental risks the treasury will underwrite, and building governance to underwrite them.
- Smart-contract risk. Aave, Morpho, Maple: each carries a non-zero probability of exploit on any given day. Probability small; blast radius, sized correctly, bounded.
- Leverage risk. A leveraged staking loop has a defined liquidation point. You either model it precisely or you don't run the trade.
- Counterparty risk. Undercollateralized credit means somebody has to pay you back. Default is priced in, not surprised by.
- Regime risk. Funding rates compress. Basis trades unwind. The 20% you see today is not a coupon.
03Governance, not technology
The tech stack is largely solved. Aave, Morpho, Maple, Pendle, the perp-DEX layer: mature primitives. Anyone with a Fireblocks account and an investment policy can transact in any of them within an afternoon.
What is not solved: who signs off on a wstETH loop at LTV 73%, who escalates at 75%, who can deleverage at 77% without a committee meeting. The Investment Policy Statement, the parameter-change protocol, the drawdown trigger: those are the binding constraints. Infrastructure is the easy part.
The move from 5% to 20% is mostly a governance change, not a technology one. The infrastructure is mature; the policy is what's missing.
04A concrete first month
For the treasuries we onboard, the first month tends to look the same.
- Week 1. Read the existing treasury policy. Identify what it permits and what it forbids by silence. Most were drafted before the question existed.
- Week 2. Draft a structured addendum: eligible assets, concentration limits, leverage ceilings, liquidity floors, drawdown triggers, parameter-change cadence.
- Week 3. Model defensive and high-conviction reference sleeves against the treasury's liquidity needs. Stress across two regimes.
- Week 4. Run the high-conviction sleeve as a paper trade on a tracker portfolio. Read the daily report. Find out what the committee is comfortable with.
By week five, the conversation has shifted. The question is no longer whether to move past the prime rate; it is which sleeve, and what size.
Our reference IPS template, addendum language, and stress-test workbook are available to mandate principals on request. The framework here is the abridged version; the full edition follows a signed engagement.