Guide to Decentralized Finance (DeFi) for Asset Managers

This white paper addresses the evolving landscape of asset management, particularly focusing on the challenges faced by institutional investors in the context of global market volatility and slow economic growth in 2023. It emphasizes the growing demand for "value" from both institutional and retail investors, requiring asset managers to adopt more sophisticated client service and transparency measures.

Learn about fundamental challenges encountered by asset managers in adopting digital assets, including governance and regulatory disparities across jurisdictions, liquidity risks in DeFi, and security concerns related to smart contracts. 

The concept of tokenization of real-world assets within the DeFi landscape is also discussed, illustrating how it streamlines traditional processes, mitigates settlement risks, and accelerates settlement times. The paper showcases real-world examples of tokenized assets and payment instruments, highlighting the potential for asset managers to offer innovative investment products.

To empower asset managers in adopting DeFi, we have proposed a checklist of qualities to consider when selecting a self-custody solution. The checklist covers aspects such as self-custody technology, policy engines, DeFi access, portfolio monitoring systems, user interfaces, and the potential resource drainage associated with building a custody solution from scratch.