By Haden Patrick, Cordial Systems Director of Business Operations
In blockchain, the “trilemma” is well-known: you can have decentralization, security, or scalability — but most architectures force you to prioritize two and compromise the third.
Institutional digital asset custody faces a similar challenge, but the trade-offs aren’t about decentralization. They’re about Security, Accessibility, and Operational Control — three pillars that are critical for managing digital assets at scale.
Most custody solutions excel at two of these, but struggle with the third. Until now.
The Custody Trilemma
When financial institutions think about custody, they’re often balancing competing priorities:
- Security – Protecting assets from theft, loss, or unauthorized access. This includes measures like multi-party computation (MPC), network security, and hardened infrastructure.
- Accessibility – The ability to move assets quickly to seize market opportunities or respond to fast-moving markets.
- Operational Control – The governance layer: true control over policy creation, approval workflows, and risk management, with those controls cryptographically enforced and running directly in your environment. You’re not outsourcing trust to a SaaS vendor, you own and operate the security logic yourself.
These pillars form what we call the Custody Trilemma.
The Trade-Offs Institutions Face
In the real world, custody models tend to cluster in one of these trade-off zones:
- Security + Governance – Cold storage vaults are the classic example. Assets are well-protected and policies are rigidly enforced, with the backing of appropriate regulation and fiduciary duty. But accessibility is slow — sometimes taking hours or days. In fast-moving markets, this can mean missed opportunities.
- Security + Accessibility – Centralized exchanges and some custodians prioritize fast settlement alongside strong asset protection. But to do so, they often relax governance controls — for example, consolidating approval power within a small operations team or bypassing multi-approval workflows during volatile market windows — introducing insider and process risk.
- Accessibility + Governance – Hot wallet setups with robust policy layers can move quickly and enforce workflows, but they are optimized for speed by assigning a risk budget to fast trading at the expense of security. The always-online exposure inevitably weakens protection compared to cold or isolated infrastructure.
Even institutional MPC wallets, which aim for a balance, typically introduce operational complexity that still forces compromises somewhere in the triangle.
Breaking the Trilemma with Cordial Treasury
Cordial Systems designed Cordial Treasury to remove these trade-offs entirely. As the only self-hosted MPC custody platform built on zero trust security principles, it delivers all three pillars - without compromise:
- Security – MPC and threshold-based cryptography secure both the transaction layer and the governance layer. No centralized policy database as a single point of failure.
- Accessibility – Assets can be moved with the speed required for trading, staking, or rebalancing. Our architecture can process hundreds of signatures per second, enabling market responsiveness without security shortcuts.
- Operational Control – Policy generation, authorization workflows, and risk management are embedded directly into the same secure architecture. This means you can overlay your own operating and control models, instead of inheriting preset policies or another vendor’s assumptions about risk. Governance strength grows with your business and doesn’t erode as accessibility increases.
This approach is atypical in custody. Most providers treat operational control as a separate layer - meaning it’s often the first pillar to be sacrificed when speed becomes a priority. Cordial Treasury integrates it into the same secure, distributed logic that protects transactions themselves.
Why It Matters for Institutional Custody
For asset managers, proprietary trading firms, exchanges, and custodians, the implications are clear:
- You no longer have to choose between market agility and governance rigor.
- You can operate in your own secure environment - on-premises, private cloud, or hybrid - without relying on third parties and blackbox products.
- You can align with Zero Trust principles while retaining complete operational sovereignty.
The Custody Trilemma doesn’t have to be a permanent constraint. With the right architecture, you can have all three - uncompromising security, rapid asset accessibility, and complete operational control - in a single custody solution.
Cordial Treasury gives financial institutions full sovereignty over their digital assets, without relying on third parties or sacrificing governance rigor for speed. Whether you’re an asset manager, proprietary trading firm, exchange, or custodian, you can operate in your own secure environment, scale with confidence, and meet market demands without exposing your business to unnecessary risk.
Discover how Cordial Treasury can redefine custody for your institution. Book a demo today.
