Valkyrie Investments will oversee the €700 million token treasury of NEM and Symbol Protocol as part of a rapprochement between modern asset managers and the digital realm.
The multi-sig setup, which went official on Jan. 25, according to the chain's data, is an early example of collaboration between two disparate corners of crypto. Valkyrie is a Wall Street-oriented company known for its bitcoin futures exchange-traded fund; Symbol is one of many blockchain protocols where pseudonymous users are building "the future of finance."
Their seemingly bizarre coupling comes as the crypto industry scrutinizes pseudonymous cash management. Earlier Thursday, allegations surfaced that Wonderland, a reserve currency protocol, had QuadrigaCX co-founder Michael Patryn as its coin custodian.
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NEM and Symbol, two separate blockchain protocols that voted to merge, had "a bit of a history" of cash management problems, said Hatchet, a senior contributor to CoinDesk. On the project's Discord, he repeatedly lobbied for a partnership that would bolster that checkered reputation.
“Partnering with someone like Valkyrie really helps ensure that the community has that second set of eyes, that second governance group, making sure that those funds are actually used to benefit the NEM and Symbol community,” said Hatchet.
This partnership comes in the form of a multisig smart contract containing nearly 3 billion NEM tokens (worth around €295 million at current prices). Valkyrie employees control four exclusive slots, with core contributors Jaguar, Hatchet, and Gimre running the other three. Five signatures are required to run.
“I think we are the only ones working with a DAO and a protocol treasury as an asset manager,” Leah Wald, CEO of Valkyrie, told CoinDesk in an interview.
Your company will take on the role that an in-house finance team would normally play: auditing, accounting, asset management, etc. Their new client opted to pay a management fee of less than 1%, according to Discord.
The arrangement had virtually no backlash. Executed via a hard fork, more than 92% of network validators picked up the change, according to Hatchet. They had been planning the switch since last August, Hatchet said.
The joint NEM and Symbol communities turn to Valkyrie as a financial guru, as seen on the Discord server. Hatchet has variously described Valkyrie as a "CFO", negotiator, reputation builder, and potential bridge into the fintech and venture capital worlds.
Valkyrie also sees this as a branding opportunity.
Wald said there is "tremendous potential" to meet the cash management needs of DAOs. "We're talking to some other protocols," he said.
According to Wald, there has never been a better time to inject some confidence into the sometimes murky world of pseudonymous on-chain money management. Wonderland aside, Securities and Exchange Commission Chairman Gary Gensler "is very focused on our industry," he said.
“I think it makes sense for cryptocurrency protocols to partner with traditional financial asset managers or general partners because we're all in the hot seat right now,” Wald said.