DATs Are Sidelined.

Institutional crypto holders manage tens of billions in digital assets, yet most operate with a fundamental inefficiency: they’re leaving hundreds of millions in yield on the table through overly conservative buy-and-hold strategies.

This conservatism, while suboptimal from a pure return perspective, reflects entirely rational responses to the current security and regulatory landscape.

The Buy-and-Hold Trap

Corporate treasuries and institutional crypto vehicles have become large holders of digital assets, managing sophisticated portfolios worth tens of billions collectively. Yet despite this scale and sophistication, most employ surprisingly basic strategies.

Most corporate treasuries hold their crypto assets idle, earning zero yield on billions in holdings. Even when institutions pursue yield generation, they typically limit themselves to basic ETH staking rewards, earning 1-3% annually, a fraction of what’s available through established DeFi protocols.

Security Concerns Drive Conservative Strategies

The reluctance to pursue higher yields isn’t wrong; it comes from genuine security concerns that have shaped institutional crypto strategies. Corporate treasuries and institutional fund managers operate under strict fiduciary duties. Smart contract vulnerabilities have led to billions in losses each of the previous years, with DeFi protocols accounting for the majority of incidents.

Deterministic Security Changes the Equation

Institutions want blockchain’s efficiency gains—24/7 settlement, programmable compliance, reduced intermediaries—but fear that hack losses become permanently finalized. The emergence of deterministic security infrastructure could resolve this risk-return dilemma by preventing invalid transactions from executing in the first place.

This approach works by enabling the dApps to define security rules, called assertions, that specify states the protocol must never enter.

The Path Forward

The institutional crypto market stands at an inflection point. Regulatory clarity continues improving while DeFi infrastructure matures, yet the fundamental security concerns preventing capital deployment remain unresolved through current approaches.

Deterministic security offers a path forward that addresses institutional needs without compromising on yield potential. By making protocol violations impossible rather than detectable, this approach enables DATs to pursue sophisticated strategies while maintaining fiduciary responsibility.