#102: Navigating Web3 Treasury with Rohit Goel from Protocol Labs

Most Web 3 companies with open source software don't have conventional sources of revenue. So in Web 3 companies, Treasury takes on a much more crucial role in the organization as it's responsible for generating revenue. Whether it's via token sale programs by staking tokens or other investment strategies. The second big difference is Web 3 Treasuries have a token heavy balance sheet which can experience massive volatility in the value of assets as the market fluctuates. So how to dampen this volatility is a very difficult problem to solve. We've had some success with it using options and then lastly, so Web 2 Treasuries are typically staffed with experienced people from banks and hedge funds. Whereas in Web 3, sometimes there is no headcount dedicated to Treasury management at all. Welcome to the Accounting Quits podcast where we help accounting and finance professional slurn how to manage a business using crypto. Rohit Gouill has been the treasurer of protocol labs for the past five years, the creators of Filecoin and IPFS. As the first Treasury hire, he built their Treasury function from scratch with a billion dollar in assets and transformed Treasury into a revenue center by deploying low-risk options strategies on crypto assets. Rohit, what are some of the best practices for Web 3 Treasury management? I would start with liquidity management, so maintain 18 plus months of runway in Fiat or stablecoins. There should be definitely certain allocation to stablecoins because they improve operational efficiency by eliminating banking delays or they facilitate cheaper cross-border payments. The next important topic is asset diversification, especially Web 3 projects where their Treasury is concentrated in their native token. We try to diversify away from the native token into reserve assets like Bitcoin and Ethereum. And speaking of native tokens, Wallet hygiene for the native tokens is very important, so one should have separate wallets with separate permissions for different groups of people based on the intended use of the token. In this episode with Rohit, we'll unpack fundamentals of the treasurer role, principles for building a strong Web 3 Treasury. Web 3 Treasury in practice from designing Wallet-based controls, sending exposure limits across DeFi, building yield strategies, and much more. And before we dive in, a quick note about the Accountant Quits Community Platform for Web 3 Accounting and Finance Professionals. Inside the platform, you can connect with Piers working in Web 3, John Focused Chat Groups, Access Job Opportunities, and attend practical workshops on Web 3 Finance. You can join for free by heading to theaccountantquits.com/courses and selecting free membership. The link is also in the show notes. Lastly, if you're new to this channel, make sure to like this video and subscribe. It really helps us to grow the channel and spread our message to more finance professionals. Now let's get into my conversation with Rohit. Rohit, welcome to the show and thanks for making the time to be here. Absolutely, Omar. Thanks so much for having me on this podcast, looking forward to our conversation. So to start, Rohit, can you please share your background? How you became interested in blockchains a long time ago now? And maybe the story becoming the treasurer of Percolabs back in 2021? Yeah, absolutely. So I started my finance career at a hedge fund in the Midwestern US. Initially, I was part of the corporate finance function and subsequently moved to a trading role focusing on finding arbitrage opportunities in the fixed income market. After a few years, I moved to the Bay Area where I'm still based and joined a small RIA registered investment advisor as the head of portfolio management and trading. And eventually, I decided to pivot into treasury and held senior treasury roles at various Bay Area tech companies. And about four and a half years ago, Percolabs, who's the creator of Filecoin and IPFS, as you mentioned, reached out to me, asking me if I was interested in building their treasury. And I did some research into the company. I was very impressed with their mission, with the caliber of the people, the potential of Filecoin. So yeah, I've been in the Web 3 space since 2021. And before that, I should mention that one of my really close friends, who's been mining Bitcoin since 2013, he was the one who initially got me interested in crypto. So I started trading crypto in my personal account in 2017 and went down the rabbit hole of trying to understand various projects and protocols and then took the leap into the space full time in 2021. So before we zoom in into Web 3 treasury, I want to start with the fundamentals. You've managed treasury, like I said in the intro at a large headphone, with two companies like Zendesk, one of the biggest customer service softwares, and you now Percolabs, so you've seen this role from different angles. If you have to explain to someone with the role of a treasurer, actually, is regardless of Web 2, Web 3, how would you break it down and maybe with the main focus areas would be? Yeah, so people often ask me, what does treasury do? And my response is that there are four main pillars or focus areas within treasury. The first area, which is the foundation of treasury, is operations. And there's a long list of items here. Liquidity management and intercompany funding is the most important one, which ensures that all bank accounts and subsidiaries, especially those that are international, have adequate working capital. Crafting disbursement policies for cash and token payments is also very important. These establish internal controls for payments in order to mitigate fraud, minimize errors, and improve efficiency. Developing forecasting models for cash and token flows and a lot of accountants will be familiar with these forecasting models. They help the company have medium-term visibility into their projected cash and token balances. Creating cash and token reporting dashboards is also key from the perspective of senior management and the board, because they want to know where all the liquid assets are at any given point. And bank and custodian relationship management is also another big item within operations. So treasury is typically responsible for selecting the banking and custody partners, setting up the account structure, configuring user access. And last but not least is implementing treasury management systems and other process automations. The second focus area is financial risk management. And the most key item here is hedging different types of financial risks such as effects risk, interest rate risk, and market risk. So let's dive into each of these and it's important to keep in mind that this requires a deep understanding of derivatives such as options, futures, and forwards. Let's talk about effects risk. I mean this is more relevant for public companies in the web to space when they have significant operations internationally. Movements in effects rates can cause the USD equivalent value of the buildings and expenses to fluctuate creating noise in the financial statements. So treasury typically owns the responsibility of hedging the effects risk to reduce this noise. Interest rates are a significant and often underappreciated risk for companies that either hold long term bonds as investments or have borrowed funds with a floating coupon. The thing to remember is that bonds, the bond prices move inversely to interest rates. So if interest rates rise, bond prices drop and treasury is responsible for managing this risk, which if not hedged properly in the worst case scenario, cause companies to go bankrupt. Think about what happened in early 2023 when several mid-tier banks blew up for this exact same reason. The last one here is market risk, which varies by industry. So the biggest market risk for airlines is fuel prices. A big market risk for car manufacturers is prices of materials. Bringing this back to web 3, the biggest market risk for web 3 companies is token prices because fluctuations in the market can cause massive volatility in the balance sheet. So treasury is typically entrusted with hedging all of these risks and they involve derivatives as I mentioned earlier. So the second item within this area is counterparty risk assessment and the third one is establishing controls, limits, separation of beauties. We'll dive into both of these a little bit later. So let's put these on the back burner for a few minutes. The third focus area is financing, which can be either debt or equity. Treasury typically leads the conversations with the CFO on what the optimal capital structure looks like, which essentially means how much debt should the company have in relation to its equity. And the next question is how much of that debt should be short term such as bank loans, credit facilities, commercial paper versus long term, which can be margin loans, and welcome. affordable debt, corporate bonds, Treasury is also responsible for selecting the counterparties, negotiating the terms and covenants, and once the debt is in place, ensuring that the firm is complying with the debt covenants at all times. On the equity side, again, maybe not a topic that's super relevant to Web 3, but I talked to a lot of Web 3 leaders and CFOs, and some of them has started thinking about going public. So maybe this will become more relevant for Web 3 as well. So on this side, Treasury is deeply involved in the IPO process and secondary stock offerings. And the final area within this list is investments, which entails investing the firm's liquid assets in a thoughtful manner without taking on excessive risk. So Treasury typically creates the investment policy statements, selects the investment managers, monitors, the performance of the managers, and then if applicable, it also runs stock buyback programs or token buyback programs. So those are the four main areas within Treasury. So hopefully that gives you a sense of the breadth and depth of Treasury in a large organization. Great. So now I'd like to move on comparing treasure management in Web 2 versus Web 3. So Treasury at a high level, whether Web 2 or Web 3, they do share the same mission. They should be structured to exist in perpetuity. The job is to protect liquidity, manage risk, and extend runways so that the organization can survive and operate for the long term. So when you moved from the Web 2 companies into Web 3, now at Protocol Labs, what were the biggest differences that actually changed how you did your day-to-day job? And just to clarify for the listeners, Protocol Labs are the creators of Filecoin and Filecoin also has a native token. Yeah, great question, Omar. So Web 2 Treasury management is relatively straightforward. And as you correctly pointed out, Treasury's main mandate is to safeguard the company's assets, ensure that there is ample liquidity and that all financial processes are running smoothly. However, most Web 3 companies with open-source software don't have conventional sources of revenue. So in Web 3 companies, Treasury takes on a much more visible and crucial role in the organization as it's responsible for generating revenue, whether it's via token sale programs, by staking tokens or other investments. And we'll double click into this topic a little bit later in the call, but I think this is the most crucial difference between Web 2 and Web 3 Treasuries. The second big difference is that as we discussed earlier, Web 3 Treasuries have a token-heavy balance sheet, which can experience massive volatility in the value of assets as the market fluctuates. We've had some success with it using options, but still we still continue to work on this topic to get better and better over time. And then lastly, this is more a general comment about Web 3 Treasuries stepping back from Protocol Labs. So Web 2 Treasuries are typically staffed with very skilled and experienced people from banks and hedge funds. And even if there are some people, they are typically not experienced in risk management strategies in general and specifically derivative strategies that are required for some of the more sophisticated Treasury tasks such as hedging investments. So hopefully that makes sense. Happy to answer any questions or double click into any of these areas about what makes Web 3 Treasuries more challenging, but from my perspective, more interesting and exciting as well. - Yeah, with the Greeks, more interesting. So let's move on to some of the good principles for building a strong Web 3 Treasury. And I want this topic to be aimed at a specific listener. Maybe this person has just joined a Web 3 company after a series A or after a token launch. The Treasury of this company used to be handled by the CEO, but now it's on them. Now they're sitting on a mix of bank accounts and crypto across different wallets. Maybe they have a multi-sick. Maybe they have a custodian, like a fireblocks and anchorage or a bitgo. So they've been asked to make this Treasury now a bit more professional. So before we get into controls later during this episode, I want to ask you what are maybe for you some non-negotiable principles for building a strong Web 3 Treasury from that starting point for that person. And if you can make it a bit practical, what would you put in place for the first 30 to 60 days? - Yeah, absolutely. I mean, this goes to the part of best practices within Treasury management. So I would start with liquidity management because that should really be the number one focus area for any Treasury. So maintain 18 plus months of runway in Fiat or stablecoins. Doesn't matter whether you are Web 2 or Web 3, this is a non-negotiable. And then bringing it closer to Web 3, there should be definitely certain allocation to stablecoins because they improve operational efficiency by eliminating banking delays or they facilitate cheaper cross-border payments. But it's important to only allocate to stablecoins that are fully backed and transparent. I mean, we have had so many examples of stablecoins that have deep-agged or loan up in other ways. So you don't want to be taking unnecessary risks with your company's lifeblood. This is a very important best practice to try to diversify away from their native token into reserve assets like Bitcoin and Ethereum. And there could be a certain element of market timing involved here where the token price rallies, they sell some, and then if there is a drop in the markets, they allocate that to Bitcoin and Ethereum. How they want to do it, that's up to them. But longer term, it's not a good idea to have a huge amount of concentration to their own token. Even if they believe in the project 100%, just from a risk management perspective, that's not a good idea. And speaking of native tokens, wallet hygiene for the native tokens is very important. So one should have separate wallets with separate permissions for different groups of people based on the intended use of the tokens. So there should be separate wallets for ecosystem initiatives, investments, Treasury projects, that just most of your audience's accountants, so I'm sure they understand how important it is to keep the tokens for different purposes in different places, so they can track their usage and rewards generated properly, and that basically leads to cleaner bookkeeping. A topic that's close to my heart is having cost-effective financing solutions in place. And this is something that not a lot of people within Web 3 pay much attention to. So I think it's important to proactively find lenders who are good fit for the business, negotiate pricing and terms, and then execute necessary documents, such as master loan agreements. And sometimes these docs can take up to three months to negotiate and execute. Because if you suddenly realize that you need cash, then the choice becomes, hey, do I fire sell some tokens? Or if I have access to financing, do I tap that financing? I would think that the answer in most cases would be tap that line of financing, but you have to do work beforehand to have those financing options available, so you can access them quickly if there is an urgent need for cash. Can I interrupt you on this one? What's a good example there? Yeah, absolutely. So there are, again, the simple loans within the Web 3 space are sort of margin loans. So for example, if the choices, do I sell might, let's say, token prices have dropped, the company suddenly need to cash. Now the choices, do you sell your tokens or do you access financing? So if you believe your token is undervalued, again, I should preface this by saying that this is not investment advice, but if you believe that your token is undervalued and you don't think this is a good time to sell your token, then it would make a lot more sense to use those tokens as collateral to borrow dollars. And then if the market moves in the desired direction, prices go higher, you can unwind the loan and sell tokens. But again, as they say, there is no free lunch and finance. Let's say you believe your token is undervalued, you'd rather not sell it, but use it to borrow some dollars or any other fiat under a margin loan structure, but then the token price drops further and you get a margin call. So there are risk involved in these strategies, so one always has to consider the pros and cons. Hopefully that answers your question. Before we continue, let's take a quick commercial break from our sponsor. If you're serious about running your business using crypto, you need tools built for crypto. One of my favorite apps, and yes, one that I use multiple times a month, is Request Finance. This app has been a game changer in how I invoice my client. and receive stable coins and crypto directly in my wallet. But hey, there's so much more to it. 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I'm sure the listeners would always appreciate to have those practical takeaways. Now, I want to move on to. Sorry to interrupt. There's just one last best practice within my list, and I'll quickly go through that. And it's really important. And this is the best practice for potentially extending the company's runway. So we think that the endowment portfolio approach makes a lot of sense. What this means is structuring the investment portfolio such that the principal invested is preserved in real terms. So you never sell any assets, and you use the portion of the returns to fund the organization's ongoing op-ex. A good example of this approach is endowment set, I.V.D. universities, such as Harvard and Yale. So just as something to think about, I don't think any Web 3 Treasury has solved this problem yet. But I think this is a good approach for thinking about how to invest one's assets and potentially extend the runway significantly. Would you just describe, would that be what active management of a Treasury looks like? So using the returns generated by the investment to fund the operating needs of the company? Well, it doesn't necessarily have to be active management. So the simple equation is, what's the size of your assets, and how much return can you generate on those assets? And then so A is your size of assets. B is the potential return that you can generate every year. So eight times B. How much cash does that portfolio generate? You know, is that enough to cover your ongoing expenses? And then if the answer is no, then you know, potentially you need to take slightly more risk in the portfolio to generate higher return. And then you're moving towards the active management approach, which I don't necessarily recommend. But the to answer your question, it doesn't necessarily imply active management. It just it applies just changing how one thinks about investing their assets. And some of it can be done internally by the Treasury staff for others. You might need to hire professional investment managers. So, you know, that's a whole different discussion. But it's more about that mindset that if you have native tokens. If you're selling those tokens, you're potentially putting pressure on the price of the tokens. And you don't have an unlimited supply of those tokens. So it's more about shifting your mindset about how can you potentially get to infinite runway by investing your assets in such a way that you're never selling them. And just the returns continue to fund the operations of the organization on an ongoing basis. So again, it's I don't think anyone has solved this problem yet. It's a good way to structure this problem and think about it. Perfect. Thanks for clarifying, Robert. Now, a lot of our listeners, they're sitting on quite significant balances with a mix of fields, stable coins, native tokens. But they don't really have a dedicated treasury team. Oftentimes it's one to two person finance team. They're doing payroll, they're doing month close reporting. But now they also being asked to go and earn yield in define. I want to ask you how should these finance teams think about building a diversified portfolio, including stable coins and volatile tokens. Should they actually outsource this function to a professional investment manager. Maybe that's the first question and then I'll have a follow up question. Yeah, so this builds nicely on what we just discussed. And again, I think we discussed here should be considered investment advice. I'm just sharing what I've learned from my own experiences in web to in web three. So let's analyze this along three main kinds of assets that web three treasury is hold US dollars or fiat stable coins and tokens. Again, these are like some very, I'm starting with very basic principles that I used in web to all the time and then I'll sort of focus more on web with three. So starting with US dollars. So ensure that the funds in the bank accounts are swept overnight into money market funds. This ensures that not only are you earning a competitive return on your cash, you know, right now. We can potentially generate between three and a half to three point seven five percent analyze return on cash. But it's key to understand that if your cash is swept overnight into a money market fund, then you're also side stepping the credit risk of the bank. If something happens to the bank, then that cash is actually invested in a money market fund, which is a ring fence structure completely separate from the bank's balance sheet. And one can also invest in the top money market funds and bond funds via liquidity portals that are operated by Goldman Sachs, straight street and a few other banks. And the yield for the same money market funds via these portals can be higher by 20 to 30 basis points, which might not be material if the size of the treasury in is in tens of millions. Then we are talking about some real dollars that you can pick up by investing via these liquidity portals rather than just having your funds weeks, we're overnight. And but I also realize that a lot of projects in the web three space don't have access to traditional money market funds. But now I think that problem has been solved already there are on chain money market funds like black rocks, middle, on the finances, or USG, which are really good options for generating yield on US dollars. And they also have sort of 24 settlements. So those are great options for on chain treasuries moving on to stable coins. So stable coins that are part of the working capital and sitting in custody accounts. There are ways to generate yield on that as well. However, these vary by custodian, for example coin base pays rewards on usdc, but anchorage does not. So in anchorage one can convert usdc into usdg or py usd which is PayPal stable coin and generate a similar a dawn. So one has to really look at which custodians they are using. What are their policies for rewards can they get these rewards simply by converting one stable coin to another. And then for longer term holdings one can generate yield by lending to defi pools such as maple that's an extremely popular platform and the return there is significantly higher than that of money market funds. And the last asset type here is tokens. So staking is an easy solution. I believe most web three freshries stake their assets. And then the yield and ease of execution varies widely from one token to another. And then finally option strategies such as covered calls are also a good way to generate yield and these strategies involve generating premium income by selling options and they are definitely closer to active management. So it's best to outsource these to trusted investment managers with clear guidelines and risk parameters. Have you spoken to all the treasurers or not necessarily treasurers. Let's say web three teams in the industry that we basically use derivatives in house and not outsourcing this because it is like quite complex and it requires like specialized knowledge to start dabbing with derivatives. Is it always the case that this would be outsource to like a professional service provider. So there are two ways of doing it. You can outsource this to a professional investment advisor. So these investment advisors have to be in the US. They are called RIAs registered investment advisors and they are fiduciary to their clients and the documentation required to onboard these is relatively simple. So you can hire an international manager. They might charge you management fees. They might charge you performance fees. But then and again, there is a principle versus agent approach. So if you hire an investment manager for these type of strategies, there will be more of an agency setup where if you want to let's say put on a hedge or run a strategy to generate yield via options. strategies, they'll go out in the market and try to find the best prices from their trading counterparts. And then the other approach is to execute these strategies via market makers who don't have discretion. But in the second case, you typically have to sign Istas with these market makers. And that can be a very long and complex process. I remember that initially it took us six months to put an Ista in place with one of our trading partners. And it's gotten better over time. But you have to be mindful of all of these costs and prerequisites for putting these strategies in place. For example, negotiating an Ista. And that requires lawyers who are experts in these types of documents. So yeah, it's not only time, but also money that needs to be invested into putting these relationships in place. And then with market makers, you have what's called the principle setup where the market maker is taking the other side of the trade, but then they don't have any discretion. So you have to basically direct all of the trades. So I would definitely not recommend this setup for folks who don't have expertise and derivatives. So best to outsource this to an investment manager who has discretion. And you just give them the guidelines and a risk framework. And then they operate within that. But then they have discretion to in terms of how to structure the trades with which counterparties quickly take evasive action if the market is moving in the wrong direction, etc. Now Rohit, one of my full of questions was around monitoring your position. So let's go. You've deployed the treasury across DeFi. You've staked your tokens. Now you have to monitor your position. In Web 3, we have amazing transparency. We also have a lot of noise. So how do you set up an on-chain monitoring? So you're getting insights from your position. And I know that there are certain tools like hexagate. They help you to with your on-chain risk monitoring. I want to ask you if you've previously used tools like this or how would you set up like an alert system. Yeah, that's a good question. And before I answer that, let me quickly talk about sort of position limits and protocol caps because that's an important part of risk management for the investment portfolio. And a simple risk management metric is that the allocation to any strategy or partner should not exceed 10% of the assets. And then the allocations should not exceed 10% of the protocols AUM or TBL. So we track these allocations on a weekly basis and rebalance if the allocations breach these limits. And then regarding monitoring, I agree that it's difficult for a small treasury or finance team to stay on top of things 24/7 and take protective actions quickly. So we have looked into tools such as one token and octave, which is OCTAV, who I believe you are familiar with. But ultimately we decided to go in a different direction. So as I've mentioned a few times during our conversation today that all of our DeFi allocations are via professional investment managers. So they have DeFi experts on their staff. They have deep relationships with the various protocols. They are monitoring everything on a 24/7 basis to see if you know any stablecoins are deep begging or if there's a hack in one of the protocols and they can move quickly. And they charge us a nominal fee for generating a healthy risk adjusted return. So we really like this setup because treasury has 15 other things to focus on. So we would rather outsource this to experts who do this on a daily basis. Yeah, I agree. Now and for the listeners, one of those companies you mentioned before was OCTAV, I'm sure the listeners will be familiar to it. They were a previous sponsor of this podcast, actually. And great, so that brings me to the next topic that I want to go through, which is on counter party risk management. So in crypto, the main counter parties, a treasury could be exposed to would include your centralized exchange, your custodians, your stablecoin issuers, and your DeFi protocols with the risk being like the protocol risk with any small contract exploitation. So when you're designing a treasury policy for crypto, how do you actually set exposure limits and monitoring for those kind of players? And maybe if you can give an example of a counter party that you say, okay, you'll tolerate risk there and one where you say no, you will rather have zero exposure on risk and maybe why? Yeah, counter party risk management is definitely a big topic for web three treasuries, especially after what the industry went through in 2022. So in my opinion, here are some of the best practices for managing counter party risk. So you can implement variable maximum credit exposure limits based on a counter party risk assessment that you conduct internally. And this risk assessment can be a score based on various factors. Some of the factors being size and scale of the counter party. So if they have operations or presence in multiple markets around the world, that's a plus, the financial health of the counter party. What's their market cap, the total size of assets, credit rating, stock performance, if they are a public company proof of reserves, security, do their products and systems provide strong security against hacks and breaches? Are they rated highly by third party security assessment companies? The reputation of the counter party, do they have a history of lawsuits, fines, allegations of illegal conduct? You definitely want to stay away from those. And then client feedback is important before onboarding a new counter party. I always like to get feedback from their existing clients in terms of their products and services. So using these various metrics, you can create a score that you assign to each of the counter parties. And then the next thing here is diversification and redundancy. So I talked about how you analyze each counter party, you assign a score to them. And then you also want to make sure that you're setting up relationships with at least three counter parties for each area of treasury. This prevents any one counter party from having insight into everything that you're doing and also provides vital redundancy and avoid relying too much on any one counter party for multiple treasury functions. And then meet with these counter parties formally, at least once a quarter to get an update on their business and update their credit score assessment. So again, it's not rocket science, but if you follow this approach diligently, you can be aware of the risks that you have with the various counter parties and stay in touch with how things are evolving over time. And regarding your question about the one counter party that I'll tolerate risk with. And I would say that is custodians because the 10% of assets limit I mentioned is not practical for custodians because that wouldn't mandate having too many custodians. So I would definitely make an exception for custodians. And then the one counter party that I'll never accept exposure to would be defy protocols that have very small TBL or have not passed the required security orders. And our investment managers typically conduct exhaustive due diligence of various T5 protocols before they allocate our assets to them. Perfect. That was clear. Now I want to move on to the next topic for today, which is more on governance and internal control. So in Web3, treasury does not only arise from your market exposure, but also from an operational standpoint. And also because in Web3, everything is different than TRIPFY. So meaning how payments are executed who's got wallet access and basically what different Godreels you have around your on chain activity. So if you were helping a Web3 project on their internal controls, when let's say it comes to payments, how would you structure different roles and responsibilities, the approval workflows, who has wallet permission, spending limits, reporting like all of those, and should all of these usually be formalized into a document? Yeah, absolutely. So and this is a pretty standard practice within treasury, at least in Web2, every treasury has a disbursement policy which sort of fleshes out all of these controls. And it's reviewed by the finance leadership once a quarter, once every six months. And we have a similar disbursement policy in place at protocol labs as well. So as I mentioned earlier, the objective of establishing these controls is to mitigate fraud, which is obviously a huge concern in Web3, minimize errors and improve efficiency for payments. So segregation of duties in my opinion is very important for this. So no single user should be able to both initiate and approve transactions or modify access controls by themselves. You mentioned transaction limits. So one should have daily and transaction thresholds by user, wallet type or currency. White lists are very important to minimize errors, pre-approved count of parties, addresses or exchanges should always be white listed. And any large transfers should always be made to white listed addresses rather than sending them to one time addresses. Approval matrix is absolutely key, which basically dictates how many approvals you need for a transaction. And typically the higher the value of the transaction, the more approvals you need. You can implement time delays for really large transfers so that the systems put a 12 hour or 24 hour block before a very large transfer is released. In case there is some fraud and play, you can have geo and IP restrictions which restrict transaction initiation from specific regions. You can have audit trails. Reconciliation is very important. I think every accountant understands how important it is to reconcile bank accounts, wallet activity to make sure that there are no fraudulent transactions. And then the other area within controls is IT security or system administration. So here it's important to use the least privileged principle, which basically means that user should be granted only the minimum access and permissions required to perform their designated tasks. When employees leave the company, their access to all of the systems should be terminated immediately and any changes to user access should go through dual administration. So I think these are some of the controls at a higher level, which would ensure that payments are being processed efficiently but also eliminating any fraud. Yeah, it's high level, but I think it's a great checklist like that you just provided. I think if the list is just so you know the transcript of this conversation is also available on the website of the accountant quit. So you can actually have a great checklist there. You can copy paste that into chat GPT and you can build like a world management policy. Like of course you would improve it, but you have a great checklist that Roheaches shared. Now we recently ran a workshop on how to build a real time crypto financial dashboard. The court take away from that was very simple in web 2 you always know your cash position. I mean it's easy to know it in web 3 you have your wallets across different chains. You have your exchange accounts, you have your bank accounts and of course none of them talk to each other. So for a treasury just to answer hey how much cash do we actually have today. It's not very straightforward like it's a bit manual. So from your perspective, I want to ask you how do you approach. Yeah, automating that consolidation of crypto and fear in probably a real time fashion if that's possible and yeah, that's going to be my first question and then I'll have a follow up with you. So then I'll have a follow up question. Sure, as I mentioned before, it's very important for the senior leadership team and the board to have a detailed picture of the company's liquid assets. So we have developed a treasury dashboard that captures all of this information across the various programs and partners. We have updated the dashboard weekly but unfortunately the process of updating the dashboard is still quite manual and we are exploring whether we can leverage Gemini, which is the AI tool embedded within Google workspace to make this process faster and less painful. So yeah, we do have a very comprehensive dashboard but it still lives in Google sheets is relatively manual but hopefully as AI gets better and we learn to use it more effectively, we can automate some of the steps within the overall process. And maybe a follow up question more broadly speaking, are there any web to or with three tools that you found particularly useful for managing the treasury. Yeah, so regarding tools for treasury management, there are several good tools on the cash side, Kareeba, high radius and there are several on the crypto side, fire blocks, bit go. But I haven't found anything that combines both in an elegant fashion so typically you have to run these tools in parallel one for free art, one for crypto and I would love to have a tool that combines both of these. Yeah, so at the time of this episode, we've already published this workshop but I would actually recommend the listness. I'm not sure if you know about this but we have this community platform where we host monthly workshops. So for example, we just had a workshop on how to build a crypto financial dashboard using AI and every month will bring forward like a different topic. So if you want to access those, you just have to go to the accountant quits.com/courses and you can sign up to our workshop. Now this brings us to my last question on today's episode, Rohehead. A lot of our listeners are accountants, their finance operators and they want to grow into more senior web three roles based on your experience, which skills do you think will matemose for these web three treasury roles, finance roles over the next few years and maybe what's becoming less important. Yeah, that's a great question. So no one goes to school to get trained in treasury, most treasury professionals somehow fall into the space and they love it so much that they stay. So folks who are in web three accounting or FPNA already have the technical skills and understanding of digital asset operations to take on treasury related tasks. So my answer is going to be a little bit different from talking about hard skills because I believe that to truly succeed in treasury soft skills, I believe are a lot more important. So web three treasury is a relatively new area and there are lots of difficult problems to solve. So one must be comfortable thinking out of the box and employing first principles problem solving. One must also be a strategic thinker. The outcomes of a lot of treasury initiatives are often heavily impacted by the financial markets and no one can predict what the market is going to do. So it's important to think in terms of scenarios and proactively develop plans for each of the scenario. And if the worst case scenario materializes one doesn't panic and can calmly execute the pre agreed plan and last but not least communication and leadership skills are absolutely key. I'm definitely biased, but I believe that treasury is the heart of any organization and it works closely with internal partners such as other finance teams legal product and external partners such as banks custodians, market makers, investment managers. And it's important to build strong working relationships with each of the partners, negotiate effectively with them and be able to influence people who don't report to you. Perfect. Rohit, I really enjoyed recording this episode today. Speaking about treasury management is one of the topics that we'll keep bringing forward in 2026. We started last year, but this has been great having you today as it's a tradition on this podcast when we end the episode is to ask the guest for his favorite quote or maximum. Is there anything that comes to mind? Absolutely, I have a couple of favorite quotes. The first one is specifically for treasury and the second is more general. So the first one is cash is king. This phrase is very popular in web to treasuries, but not so much in web three possibly because of a slight anti fiat bias. I think it's important to choose pragmatism over ideology given that a large majority of a web three treasuries assets are in crypto and their liabilities are expenses are in fiat. And this mismatch can really hurt a company if it's not managed properly. The second quote I'd like to share is by I return Senna who's regarded as the greatest formula one driver of all time and he said every driver has a limit mine is a little bit further than others. I find this quote very inspiring and what it means to me is that to excel in anything one does one has to be willing to work harder than the others keep pushing their personal boundaries and not be afraid to take well thought out risks. Beautiful. It's a great way to and a podcast on treasury management. If people want to reach out to you, they want to connect with you. What's the best way to do so. Best place for that is to find me on LinkedIn. I believe you're going to share my LinkedIn profile. So yeah, that would be the best place. Perfect. I'll do that. Thank you so much for coming today.