Overcoming Web3 Operational Challenges

Key insights you need to know

Building companies is a hard endeavour. Ranging from ideation to execution to finding PMF, there are thousands of pitfalls that a founder faces. These challenges manifest in different ways as the teams grow and scale. Leaders understand that the difference between success and failure is narrow and lies in their decision-making and focus.

The more operators and leaders can prioritise the business's core, the higher the chances of its success. In reality, there is much more on their minds. A whole bunch of behind-the-scenes work is needed to keep everything running like a well-oiled machine.

Finance is one such function and a critical one at that. Operations don't need to be a long list of manual tasks and time down the drain. Given this, there is an ample range of tools streamlining financial operations for conventional companies. This is not the case for Web3 native companies managing funds on-chain. The challenges here are native to the space that we operate in.

Current landscape

Let's look at the tools at the disposal of Web3 organisations today. As they say, follow the money.

A large portion of a Web3 organisation's treasury is held in digital assets. Assets must be kept secure and accessible for day-to-day operations.

Given the nascent state of the web3 market, founders must ensure that their capital is safely diversified across avenues. Projects need to identify their needs and risk appetite considering parameters like access rights, ownership model, asset type, and liquidity requirement.

Web3 founders want to:

• safeguard assets with hardware wallets or with professional custodians,

• store operational capital in a multi-sig or EOA accounts over different blockchains,

• allot individual wallets/accounts for designated teams/people, and maybe even

• hold some assets on exchanges for investments, swapping, and off-ramping.

Accounts spread over several platforms, chains, and addresses bring the required diversification at the cost of ease of access. Keeping tabs on the 'balance sheet' is a real pain too. Often, someone from the team manually tracks balances on an Excel sheet. This is a time-consuming exercise and is static.

We must be able to dynamically monitor not just balances but also the status of all transactions. Payroll, subscriptions, expenses, rewards, and more are a big part of financial operations. And these in-and-out transactions involve multiple fiat and crypto transactions spread over multiple blockchain networks.

Operators in the Web3 space have experienced the pain of manually processing what could be simple batch transfers. Creating telegram groups for coordinating multi-sig owners for their signatures is also commonplace. Often, multiple people have access to critical access and information, increasing the likelihood of funds being misused, intentionally or otherwise. 

Not ideal operation conditions, I'm sure you'll agree!

What will help the founders and their teams operate seamlessly and efficiently?

Based on our firsthand experience and feedback from teams like yours, here are the key elements that can improve your operational workflow.

What can be better

Non-custodial accounts with easy recovery 

Non-Custodial Wallets trump Custodial ones when it comes to control.

Not your keys, not your coins. But beware with great power comes great responsibility! This is important as a lost or compromised key could bring your operations to a standstill. Simpler key management should be easily enabled, allowing easy recovery and backup options.

Unified Asset Dashboard and Monitoring 

A comprehensive, automated view of your entire organisation's assets, whether spread across exchanges, Gnosis Safes, or externally-owned wallets, is necessary for informed business decisions. Monitoring transactions and alerts across all wallets and accounts should be easier than it is today.

Efficient Delegation with Customisable Access Control

The ability to set role-based access to the accounts will help teams with quicker turnaround times and better delegation. Initiating transactions is not necessarily the best use of a founder's time. Custom spend access below particular thresholds will simplify your life and ease the organisation's interactions with external vendors.

Automation and value add features for transactions.

Manually entering recipient addresses for recurring activities such as vendor settlements, payroll, and airdrops wastes much time and leads to manual errors. Such a practice should no longer be a concern for Web3 companies. Automated processes and few-click operations can reduce errors and save time for tasks like bulk transfers. Historically for this, orgs have relied on external applications.

Simplified Fiat operations with easy on/off ramps

Web3 companies are all too familiar with challenges in integrating fiat rails. Restricted banking partnerships, regulatory complexities, account closure risks, and plenty of reluctance! What you need is fiat access with easy on and off ramps.

Ideally, these should be on a single platform simplifying operations while ensuring security.

Traditional financial infra has developed effective and efficient support systems for decades. In comparison, the blockchain ecosystem is recent history. However, if we are to scale securely and firmly from here, the management & operations need to be simple and efficient.

The Web3 teams need to be able to focus on creating, not deal with the challenges behind operating a crypto org!

Are you ready for simpler crypto finance management? Our team is cooking something that'll revolutionise how you handle your financial operations. Help us craft a better solution here.