The Importance of De-Risking Your Digital Asset Investments
What we mean by “De-risking”
Investing in digital assets has become increasingly popular in recent years. With the rise of cryptocurrencies and decentralized finance, it’s important to understand the risks associated with digital asset investments. One key risk is the threat of hacks and cyber attacks. This is why it’s crucial to implement a de-risking strategy to protect your digital assets.
Just like traditional companies diversify their treasuries across multiple bank accounts, banks, and currencies, web 3.0 companies need to do the same. Ensuring there is no single point of failure for your treasury is no longer a “nice-to-have.”
De-risking can be achieved by spreading your assets across multiple self-managed, on-chain wallets. This helps to reduce the impact of a potential hack or loss of private keys. Having multiple self-managed, on-chain wallets gives you complete control over your assets. This means you no longer need to rely on the counter-party risk of storing your assets with an exchange or lender who can misuse and freeze your assets at any time.
One way to create multiple wallets is by setting up your own self-custody wallets. This gives you complete control over your private keys and eliminates the risk of a third party mismanaging your assets. Self-custody wallets come in different forms, such as hardware wallets, software wallets, and paper wallets. Each type of wallet has its own set of benefits and drawbacks, so it’s important to choose the right one for your needs.
Another option is to connect to licensed custodians. This allows you to benefit from their security measures and insurance coverage. However, it’s important to choose a trusted and reputable custodian that complies with regulations.
Navigating the operational nightmare
With that said, managing multiple wallets and custodians can be complex and time-consuming. That’s where Coinbag comes in. Coinbag is a platform that connects you to multiple self-custodial wallets and licensed custodians, all from a single, easy-to-use platform. This reduces the operational complexities of managing and de-risking your assets, allowing you to focus on your investment strategy.
With Coinbag, you can access a range of self-custodial wallets and licensed custodians, so you can choose the solution that best fits your needs. The platform is designed to be user-friendly, with a simple and intuitive interface that makes it easy to manage your assets across any number of wallets you create.
In addition to connecting you to multiple wallets and custodians, Coinbag also provides a range of features to help you manage your assets. For example, you can set up automated rebalancing, connect to interest-earning protocols, view detailed portfolio analytics, and access real-time market data.
By using Coinbag, you can simplify the process of de-risking your digital asset investments, while also benefiting from the security measures and insurance coverage offered by licensed custodians. Whether you’re a seasoned investor or just starting out, Coinbag is the perfect solution to help you confidently manage your digital assets.
A simple conclusion
Implementing a de-risking strategy for your digital asset investments is crucial to protecting your assets from potential hacks and losses. Whether you choose to create your own self-custody wallets or connect to licensed custodians, it’s important to have a mix of both to ensure the best possible outcome. And with Coinbag, managing, securing, and de-risking your assets has never been easier.
Want to learn how we can help?
Check us out at: www.coinbag.finance
