DeFi Development Corp: The Case For A Solana Treasury

Summary DeFi Development is upgraded to Buy, trading near NAV and offering exposure to Solana through its digital asset treasury model. DFDV's strategy focuses on SOL over BTC or ETH, betting on Solana's speed, scalability, and long-term dominance in ￰0￱ SOL generates a 10% yield, covering convertible note costs and providing accretive returns, with potential for additional revenue ￰1￱ remain due to SOL's volatility and competition, so position sizing should be modest, but the current NAV multiple makes DFDV ￰2￱ Development Corp. ( DFDV ) is a Solana-based ( SOL-USD ) digital asset treasury company. I had a chance to speak with some of their team recently and clarify the strategy.

I think their basic premise is sound for now, and as the price of DFDV isn't too bad, an appropriately sized investment in the stock makes for a decent ￰3￱ of Previous Thesis I originally covered DeFi in June, rating it a ￰4￱ was little operating history to review, as they had only just transformed the company into its digital asset treasury ("DAT") model that ￰5￱ 2025 Investor Presentation The DAT model (for DeFi and others) mainly entails raising capital and using it to purchase the target crypto (in this case, SOL). The general hope is that through some form of leverage, a DAT company can enjoy magnified returns as the underlying crypto appreciates over ￰6￱ from previous article (May 2025 Investor Presentation) This also gives the stock amplified volatility relative to its ￰7￱ SOL is already quite volatile compared to Bitcoin ( BTC-USD ), this implies DFDV could prove to be quite volatile as ￰8￱ the time, I could see the appeal for traders but not a clear up or down case, and so I left the stock with a neutral Hold ￰9￱ Financial Picture The most recent Form 10Q covers the end of ￰10￱ balance sheet shows the treasury model being implemented as intended, with nearly all the assets in digital assets ((SOL)), with most of the liabilities being their convertible ￰11￱ Sheet (Q2 2025 Form 10Q) At the end of Q2, the value of their SOL position was about $89.2M.

Q2 2025 Form 10Q While most of this was purchased in the period, quarterly results show the kind of yield they are capable of producing through ￰12￱ course, Q3 is completed, and its results will arrive ￰13￱ do, however, have some important updates about their SOL holdings, which just came out on ￰14￱ disclosed the following: Total SOL & SOL Equivalents Held: 2,195,926 Total SOL & SOL Equivalents Held ((USD)): Approximately $426M Total Shares Outstanding: 28.9M SOL per Share ("SPS"): 0.0760 SPS ((USD)): $14.67 October 2025 Investor Presentation As the stock price closed at $13.79 that same day, this is a discount to SPS per ￰15￱ only a few million in real liabilities (setting aside the convertible debt for a moment) existed in Q2 and likely haven't increased much, DFDV trades very close to its ￰16￱ expansion of the holdings follows various moves to raise capital in ￰17￱ July, there was a $112.5M convertible note ￰18￱ 4.2M shares were sold in August to raise another $125M.

A $100M share repurchase program was also announced in September, but this likely won't be utilized for some ￰19￱ 2025 Investor Presentation Taking into account the convertible debt and warrants, fully diluted shares outstanding would be 40.2M and would make the current multiple to NAV ￰20￱ there's been activity on multiple fronts, and it's certainly worth ￰21￱ and Outlook I got to understand DeFi's strategy and outlook better after speaking directly with ￰22￱ Headshots (October 2025 Investor Presentation) Specifically, I spoke with Dan Kang (Chief Strategy Officer) and Pete Humiston (Head of Research). The conversation was insightful for a number of reasons.

First, let's talk about something important that I did not mention last ￰23￱ made a conscious choice to go outside of BTC with the DAT model and was the first to do ￰24￱ I asked why, they explained that it would be difficult to compete with companies like Strategy ( MSTR ) for investor attention at this ￰25￱ a non-BTC crypto was the only rational move, and then it was a question of betting on the native currency of what they believe to be the most promising blockchain network in the long ￰26￱ Market Caps (coinmarketcap. com/) BTC is the obvious leader in crypto market caps. That's why Strategy chose ￰27￱ many, Ether ( ETH-USD ) would have been an obvious second choice, as the #2 market cap and the native currency of the Ethereum network, but DeFi went straight for ￰28￱ #6 currently, SOL's market cap stands above $100B, so it isn't ￰29￱ and Humiston both explained that they believe SOL will overtake ETH, so this was not a decision made ￰30￱ they put it, Solana has three key advantages over the competing blockchains: it's faster, cheaper, and ￰31￱ 2025 Company Article While the debate will be settled over time, there is a strong case that SOL will be a contender in the crypto space for the foreseeable ￰32￱ the volume of transactions, this is a big advantage, particularly when one thinks about the underlying purpose of a cryptocurrency: to facilitate transactions ￰33￱ is best, forming a DAT based on SOL only makes sense if one believes there is some upside to doing ￰34￱ 2025 Company Presentation They believe SOL is a long-term 50X from a recent price of $200.

The actual timetable for that, naturally, isn't something they endeavored to predict, but I suppose what really matters here is if they are "directionally correct," particularly as the DAT model should amplify those ￰35￱ 2025 Investor Presentation They base this 50X on the total revenue of global value transfer and what SOL should be worth as it gains more share of ￰36￱ DFDV to deliver strong returns, SOL will need to move in this direction appreciably over time, and they will need to acquire SOL ￰37￱ 2025 Investor Presentation One of the good things about SOL is that staking it produces real yield, currently at 10%. The recent convertible note, with a 5.5% coupon, is therefore covered, assuming SOL's volatility doesn't mean that it ￰38￱ notes therefore not only finance SOL accumulation but also produce a spread that is accretive to DFDV shareholders over ￰39￱ forms of revenue are ￰40￱ explained to me that they are open to experimenting with opportunities that come from holding large sums of ￰41￱ are certain arbitrage opportunities that present themselves already.

They've entertained the possibility of issuing SOL-based loans, market-making, anything that churns extra value. It's going to depend on what people end up doing with SOL over ￰42￱ are all things that ETFs, passively marked to their cryptos, will not be able to ￰43￱ and Risks With something like this, investors have to decide if they believe in the holdings and that their decisions will add value from there. I think an entry price for a NAV multiple of 1.2x or less makes sense, given the staking yields that are possible and the room for compounding this provides over ￰44￱ that much of this is still speculative and untested, my current idea is that risk is better managed by not paying too much of a premium to NAV not treating upside without hiccups as a foregone ￰45￱ value of SOL will depend on how well Solana competes with the blockchain platforms over time.

Then, of course, these still have to compete well with ￰46￱ factor that some should consider is the competition posed by ￰47￱ many may eschew them as nothing more than tokens of sovereign currencies that crypto is meant to bypass, stablecoins fill a similar need: fast transactions with virtually no ￰48￱ the dust settles over time is ￰49￱ addition to a disciplined premium to NAV, interested investors really ought to size a position in DFDV modestly until a meaningful history of operating results shows clear and dependable value creation with their DAT ￰50￱ all, a strong decline in SOL would make the yields unable to cover the interest on those notes and make further capital raises ￰51￱ than that, I think the basic premise is sound, and as the current NAV multiple is about 1.0x, DFDV can be a ￰52￱ DeFi made a bold move to break ranks with a non-BTC ￰53￱ a couple of key ways, I see it as more sound than Strategy's approach with BTC, given that SOL supports the Solana network and that it produces actual ￰54￱ competitive strengths for SOL and general tailwinds around all cryptos, getting DFDV around NAV doesn't seem like a bad deal, so I upgrade to Buy for now.