Case Study: How Major Financial Institutions are Building Next-Gen Digital Asset Products

Snapshot

• Client Type: Digital Asset Division of a Global Financial Institution
• Team: Internal Digital Asset Strategies and Product team building a next-generation Portfolio Management Digital Asset Strategy System
• Impact: Compressed integration timeline from Quarters to Weeks; automated multi-step DeFi strategies across custodians, blockchains, and protocols from a single orchestration layer. All with minimal engineering lift

The Business Challenge

Large financial institutions are building seriously ambitious digital asset products. The capability gap isn’t vision or capital, it’s execution infrastructure.

Some institution’s digital asset teams are developing next-generation products to enable their PMs to design and run systematic on-chain strategies: delta-neutral basis trades, stablecoin yield, and cross-protocol liquidity optimization. PMs needed to dynamically allocate capital across custodians, centralized exchanges, and DeFi protocols in real time: automatically executing multi-step strategies based on market conditions, without requiring manual coordination across fragmented systems.

The challenge: their internally built stack wasn’t architected for this level of automation. Each new blockchain, protocol, or venue required bespoke integration work. Adding DeFi connectivity, multi-step conditional execution, and cross-custodian orchestration meant months of engineering per capability. The automation layer, the part that would actually make PMs productive, was the long pole in the tent.

They need an orchestration layer that could sit inside their existing environment, connect to their custodians and DeFi protocols, and give their team a transaction engine powerful enough to encode complex strategy logic without rebuilding their core infrastructure.

Key Capabilities

Transaction Engine & Automated Strategy Execution

• Automated execution of multi-step digital asset strategies (delta-neutral, yield optimization, stablecoin rebalancing) triggered by predefined market conditions (liquidity pool composition, repo rates, funding rates, balance thresholds)
• Conditional logic templates: reallocate matured assets automatically, stake via AAVE when cash exceeds a defined threshold, liquidate hedges based on latency criteria
• All strategy logic encoded once and executed in real time across any connected venue

DeFi & On-Chain Connectivity

• Native integration with DeFi protocols including AAVE, Uniswap, Compound, and dYdX
• Multi-chain support across Ethereum, Avalanche, Base, Polygon, Arbitrum, and Optimism
• Bridging and swapping via 0x; staking via Blockdaemon

Cross-Custodian Orchestration

• Unified management across custodians (Fireblocks) and centralized exchanges (Coinbase, dYdX)
• Automated rebalancing and transfers of single and multi-asset types across custodians and chains
• Full auditability across all venues with a consistent, institution-grade data format powered by Knova Digital Twins

Workflow Controls & Compliance

• Maker and Checker role separation all while no single user can initiate and approve a transaction or workflow
• Alert engine for balance thresholds, risk analysis, and optimization triggers
• Full audit support: real-time view of financial obligations and positions across all connected systems
• Risk and compliance integration (TRM, Hypernative)

Deployment Model

• Deployed directly into the institution’s own environment so no data leaves their infrastructure
• API-first architecture integrates with the team’s existing internal dashboard UI
• Vendors and providers become unpluggable components: swap out a custodian or protocol without rebuilding internal workflows

ROI

Faster Time to Market

By plugging Knova’s transaction engine and integration adapters directly into their existing infrastructure, the team could have reduced what would have been a multi-quarter custom build to a 5-week phased engagement

Automated Multi-Step Strategy Execution

The platform would give PMs the ability to encode complex strategies once and have them execute automatically based on market triggers. What previously required manual coordination across multiple systems (custodian, chain, protocol, compliance) was reduced to a single workflow configuration. Operations overhead dropped significantly as the execution layer took on the coordination burden.

DeFi and Protocol Breadth Without Custom Engineering

Rather than requiring dedicated engineering sprints for each new protocol or blockchain, the team would have gained access to Knova’s pre-built integration library. Adding AAVE lending, Uniswap liquidity, or a new chain became a configuration decision, not a development project.

Full Visibility Across CeFi and DeFi

For a regulated institution running complex on-chain strategies, auditability is non-negotiable. Knova’s Digital Twin layer would have given the team a real-time, unified view of positions across all custodians, chains, and protocols all with a consistent data format ready for compliance and audit workflows.

Future-Proof Infrastructure

Every vendor in the stack (custodians, on-ramps, exchanges, protocols) became a modular, replaceable component. The team could extend to new asset classes, venues, or jurisdictions without being locked into any single provider or forcing internal infrastructure rebuilds.