Optimizing Web3 Portfolios: 4 Vital Tracking Tool Features

Learn 4 essential features every Web3 project should look for in a portfolio tracking tool to stay ahead in the race. From automation to security and real-time tracking, optimize your investments for success. Read on to discover how to make the most of your Web3 portfolio tracking.

Optimizing Web3 Portfolios: 4 Vital Tracking Tool Features
Photo by Edge2Edge Media / Unsplash

Can you imagine navigating a ship at sea without a compass?

Steering your financial journey without a full view of your portfolio is simply that. This lack of clarity and direction will make the journey more challenging, requiring additional efforts and resources. In the absence of the right tool, you may have to resort to less reliable & in-efficient methods, similar to how a captain without a compass will have to rely on outdated techniques such as tracking stars.

This article will give you an overview of the present assets scenario for a typical Web3 team and the way to maintain clear visibility of their portfolio.

Why is effective management of a crypto treasury so challenging today?

Let’s begin with looking at how their current asset distribution looks like.

A typical web3 team operates primarily on the funding raised through their tokens or in stable coins. The primary objectives of this treasury are

  • Capital preservation to reduce risk from price volatility
  • Liquidity management to ensure sufficient availability for operational requirements
  • Portfolio management to generate yield from the assets
  • Compliance with relevant regulations and laws

For a blockchain native project, this translates on multiple wallets across different blockchains, EOA (Externally owned accounts), Multisig accounts, Exchange accounts and Custodian accounts.

Securing capital is one challenge, but effectively managing it is another story.

And unlike the traditional financial systems, these different wallets, protocols and blockchains do not talk to each other.

Why is it crucial to have a perpetual clarity of the assets and balances?

Imagine navigating a ship not only without a compass but also on a cloudy night!

The key to successful management is having a complete understanding of your resources.  Some of the key benefits are:

  1. Clarity and accountability: A complete overview of the organisation's financial status increases transparency and accountability.
  2. Informed decision-making: A full picture of assets enables better decision-making by identifying opportunities and risks.
  3. Efficient portfolio management: A comprehensive view of assets supports effective portfolio management, diversification, and risk management.
  4. Performance tracking: With a complete financial portfolio view, it becomes easier to track investment performance and make adjustments as needed.
  5. Compliance: Having a full understanding of all assets helps ensure compliance with financial regulations and reporting requirements

How does a Web3 company track all of its assets currently?

Some of the biggest projects we spoke to are tracking their standings manually on an excel sheet!

Tracking these fragmented positions is tedious and users often do not have an overall point-in-time view of their entire portfolio. This is not because of a lack of effort or interest on their part, but rather due to the unavailability of portfolio trackers specifically designed for Web3 companies.

4 things a Web3 project must look for in a portfolio tracking tool?

Teams should look for tools built ground up for the Web3 projects that understand the unique requirements. The right tool for a comprehensive financial portfolio view should have the following qualities:

  1. Tailored to Web3 companies: The tool should be designed specifically for Web3 companies and understand their unique requirements.
  2. Accurate and updated information - The tool should pick not only accurate balances but also update them near run time. To reflect an accurate view at all times.
  3. Comprehensive asset integration: The tool should integrate all assets, including wallets, blockchains, and accounts, to provide a full view of the financial portfolio.
  4. Data privacy: The tool should prioritize data privacy and ensure the confidentiality of the organization's financial information.

A tool that possesses these qualities can effectively support Web3 companies in managing their financial portfolios and making informed decisions.

In summary, having a full financial portfolio view is crucial for effective financial management and decision-making. It provides a clear picture of the organisation's financial position and enables better risk management, performance tracking, and compliance.

Building your watch tower with the right tool that is accurate, current, comprehensive, and values data privacy is key.