Digital Asset Software Is Not Ready For Institutions – Here's What It Needs

Jake Greenstein, Partner and Head of Infrasctructure at Hivemind will be speaking at the upcoming Benzinga Fintech Deal Day & Awards. Mark Nov. 13 on your calendar for the must-attend gathering in the fintech industry!

“The Institutions are coming!” has been an oft-repeated rallying cry in the digital asset space. Yet, for all the recent fervor around a potential ETF approval within the United States, meaningful barriers still stand in the way of broad investor adoption. Regulatory clarity in the US would certainly help, but the industry has to grow up in more ways than one. While software development does not carry the glamour of court cases and billion-dollar retail funds, software products form the bedrock of institutional investing and must be designed from inception to serve an evolving investment landscape.

The digital asset landscape is littered with products either originally designed for retail investors or hastily developed in the last bull market cycle. As Head of Infrastructure at Hivemind Capital and CEO of Blueprint, a comprehensive platform for digital asset management, I am constantly evaluating new market offerings, upgrading our toolset, and building new solutions to keep pace with the rapidly changing market. 

When assessing software products, I look for seven key elements:

1. Uptime: products need to work without fail. Downtime of a data pipeline or an execution engine can be the difference between millions of dollars in trading gains or losses. Software needs to be designed to run around the clock, with no history of unexpected downtime or the need for planned maintenance windows. 

2. Immutability and audit trail: institutional investors require detailed records and a lasting paper trail. Investing platforms should produce easily accessible audit logs to enable lookback analysis and reconstruction of events. Similarly, once presented, data should not change. Too many platforms restate data with little or no ability to retrieve original results, undermining faith in the platform. 

3. API access: institutions develop their trading and research systems organically, often over years. Some of these integral systems will never be replaced; vendors should endeavor to build products that can work alongside homemade tools and not just replace them. Software products should come with a fully featured and robust API allowing full access to the platform. 

4. Multiple users and configurable permissions: institutions work in teams. As a result, products should reflect organization structures and enable widespread access to a shared platform. At the same time, administrators should have the ability to use permission tiers to customize access levels.

5. Multiple entities: most investment managers work on multiple funds, each often involving one or more legal entities. Software products need to distinguish between entities such that data is not shared across vehicles, but also reduce the friction for users working across multiple structures. As an example, requiring unique logins per user per entity adds unnecessary complexity and headache for users. 

6. Scalable business model: products encompass more than just the website rendered before users; the business model is often more important than the underlying functionality. The best products pair excellent software along with an easy-to-understand business model that works for organizations of any size. Fees should scale with usage, in both directions. 

7. Support: institutions paying hefty fees for licenses expect a high level of support. Organizations should make team members available for questions and assistance, and support coverage should reflect the global nature of the industry. That said, builders should try to make products self-serve and well documented; support availability should never block organizations from using the product. 

The digital asset landscape evolves with each network launch, regulatory change, and capital inflow. This constant state of change requires continual learning and adaptation. Products need to reflect both the growth and trajectory of this space. By incorporating the above tenants, builders can position their products not just for the next wave of investors, but to also catalyze a broader flourishing of digital assets as institutional adoption grows. 

For more insights, join me as I lead a discussion with Bill Dague (VP and Head of Data Products for Nasdaq) at Benzinga’s Fintech Deal Day and Awards on November 13th, where we’ll discuss how to build products for this developing environment.

Jake Greenstein is a Partner and the Head of Infrastructure at Hivemind. Jake focuses on Hivemind’s staking and mining activity, capital deployment into DeFi applications, and leads DeFi and Market Infrastructure venture investments, as well as Hivemind's internal infrastructure needs. Jake is also CEO of Blueprint, a next-generation digital asset management platform. Under Jake's leadership, Blueprint is on a mission transform the fragmented digital asset portfolio management landscape. starting with an industry-first free staking service.

Prior to Hivemind and Blueprint, Jake spent four years leading Algorand’s strategy team, where he supported the organization’s growth from a dozen to one hundred employees. Jake also played a key role in launching the Algorand protocol and the achievement of its all-time high market cap of over $13B. Before joining Algorand, Jake pioneered a hybrid software development and consulting role at Mastercard where he led teams building analytic and other software products for external clients and the firm’s own use. 

Jake received his MBA from Stanford University where he graduated as an Arjay Miller Scholar. He also received a BSE in Mechanical Engineering from Duke University and was elected to the Phi Betta Kappa and Tau Beta Pi honor societies.