How should DeFi protocols approach treasury investments into other crypto assets?

In a time where traditional companies are actively scooping up crypto assets supplies for corporate treasury holdings as a strategy for parking excess cash and building somewhat of a hedge and maybe alternative growth (revenue?) source, is it wise for decentralized finance protocols or ecosystems to do the same?

For instance, should a project like Uniswap buy and hold Pancakeswap’s native asset, $CAKE, as a growth strategy?

This is a question that will actively get explored over the next couple of the years.

What is most important here is that this isn't exactly something new but it would be the first time that the strategy is considered broadly. When we look at past highly successful projects like Luna (before the crash), we see how something of this nature was employed as a strategy for backing a billion-dollar economy.

Of course, that didn't go so well, despite it having been Bitcoin, the most valuable crypto asset today.

DeFi needs active capital

I am one of a couple of people that believe that active capital is more important than anything else. Everything that involves locking assets away is costing any economy a fortune.

Money needs to move, consistently! If an economy or ecosystem can't figure out a way to do that, then they lose.

When I look at traditional treasury companies like Strategy (formerly MicroStrategy) which has active bought for permanent treasury holdings, Bitcoin, and now holds 638,460 BTC, worth over $74.24 billion and accounting for about 3.21% of the asset's market capitalization, I see a future where this acquired assets do more than just sit in wallets.

The decentralized finance market ought to approach alternative assets investments in a similar fashion.

Rather than buying Bitcoin for reserve or treasury holdings, incentivize the decentralized network of participants to pull in Bitcoin for liquidity.

When you have volatile assets in holdings, you have to worry about things you generally cannot control and that's how the markets swing, but when the focus shifts to not be about holding these assets for perceived long-term appreciation or stability, but for active utilization daily as a source of liquidity, all the sudden, volatility simply becomes a market-given opportunity for generating revenue!

A network of participants can be incentivized to bridge over billions in ETH on a different network, maybe Aptos?

Several layers of incentives can be built in where not only the liquidity providers are being rewarded but even those scooping up the bridged asset's supply, given that they assume or absorb risk when doing that.

The primary reason here is that when assets are bridged, generally, it is wrapped up in the process for utilization on the chain or protocol it's being bridged to. This means that the original assets will be locked in a contract while a derivative will become the active source of liquidity and access to said bridged assets for the native chain.

Buying the wrapped version is essentially a risk and can be incentivized to promote market confidence and build stability.

When it comes to decentralized finance, the idea of alternative crypto assets penetrating other economies has to be approached as a liquidity strategy otherwise an economy, ecosystem or protocol would be acquiring unnecessary capital risks and neglecting what's most important: active revenue generation with minimal central-risk exposure!

Thank you for reading!

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