DeFi Development Says SOL Holdings, NAV Per Share Accelerated as CHAD Takes Center Stage

Key Points

• DeFi Development increased its SOL holdings and SOL per share by double-digit percentages from Aug. 12 through Sept. 30, while management expects net asset value per share to rise by a triple-digit percentage.
• The company is simplifying its operations and pursuing a more focused strategy centered on leveraged SOL exposure, supported by flexible financing and treasury yield generation.
• CHAD preferred stock is a key growth initiative: DeFi Development plans to issue shares near the $10 par value through a $300 million at-the-market program, using the proceeds to buy more SOL while offering investors an approximately 13% annual dividend.

DeFi Development NASDAQ: DFDV said its core strategy remained unchanged through August and September, while rising Solana prices and increased financing activity helped accelerate growth in its SOL holdings and net asset value per share.

During the company’s August and September business recap and AMA, Chief Strategy Officer and Head of Investor Relations Dan Kang said the business continued to operate as designed: providing investors with amplified exposure to SOL through its capital structure, treasury strategy and fundraising capabilities.

“Nothing fundamentally changed about the business,” CEO Joseph Onorati said. “The business is working as intended.”

Kang said the company’s SOL balance increased by a double-digit percentage between Aug. 12 and Sept. 30, while SOL per share also rose by a double-digit percentage during that period. He added that DeFi Development expects net asset value per share to be up by a triple-digit percentage when it reports results, though the company did not provide a specific figure or reporting date.

Financing Approach Focuses on Flexibility

Management attributed the faster pace of SOL accumulation to available funding opportunities, but did not disclose the precise mix of financing sources used. Kang said the company had evaluated several funding structures and declined certain deals involving discounts to the share price or net asset value.

He cited potential drawbacks of discounted registered-direct offerings, including discounts that can range from 5% to 15%, banker fees, warrant coverage and possible fundraising standstills. DeFi Development instead emphasized maintaining flexibility in pursuing capital-market transactions.

The company also took steps in August to simplify its business, including cost reductions, a discounted repurchase of convertible debt, the divestment of ZeroStack and a decision to concentrate on a smaller number of on-chain protocols.

Onorati said those moves were intended to create a cleaner investment story centered on leveraged exposure to Solana. While the company retains exposure to certain decentralized-finance protocols and other tokens, including $DONT, he said the broader objective is to become “almost pure-play leveraged SOL exposure.”

CHAD Preferred Stock Seen as Key Growth Tool

A central topic of the discussion was CHAD, DeFi Development’s Nasdaq-listed variable-rate cumulative preferred stock. Kang said the instrument currently carries an annual dividend rate of approximately 13% based on a $10 par value and pays dividends every business day.

Management described CHAD as an instrument aimed at income-oriented investors, distinct from the company’s common stock, which is intended to offer amplified SOL exposure. Kang said the preferred stock could broaden the company’s investor base beyond cryptocurrency-focused investors.

Onorati said DeFi Development’s strategy is to issue additional CHAD shares around the $10 par value and use proceeds to purchase more SOL. He said the company has a $300 million at-the-market program for CHAD, which management expects to use only at or around the $10 level.

“That’s going to give us more leverage, give us more SOL Boost,” Onorati said, referring to the company’s framework for generating returns that exceed SOL’s price movements.

The company also announced a CHAD repurchase program. Management stressed that the authorization was intended to provide flexibility rather than signal immediate buybacks. If the security were to trade below par after additional issuance, DeFi Development could potentially increase the dividend rate or repurchase shares, executives said.

• CHAD’s dividend can be increased if management believes it is necessary to support trading near par value.
• The company said it cannot reduce the dividend unless specified price and time conditions are met.
• Management said repurchases could reduce ongoing dividend costs or support the security’s price under certain market conditions.

Solana Yield Differentiates CHAD, Management Says

Kang said DeFi Development views the yield generated by its Solana treasury as an important distinction from preferred-stock products backed by Bitcoin. He said SOL’s native yield and the company’s operating activity provide a potential recurring source of funds for dividends without requiring the company to sell treasury assets or issue common equity.

“The treasury works to pay CHAD itself,” Kang said, adding that the company believes it has room to scale the preferred stock based on the size of its treasury and historical yield generation.

Management also pointed to recent performance under its SOL Boost Framework. Kang said DeFi Development common shares rose about 83% in the third quarter, compared with an approximately 57% increase in SOL, and that the common stock gained more than 100% in August while SOL rose around 38%. These figures were presented by management and were not independently verified in the discussion.

Looking ahead, executives identified scaling CHAD to par value and expanding issuance as the company’s largest growth opportunity. Kang said DeFi Development’s longer-term focus is on structuring the business to maximize upside participation in SOL while using long-duration capital and other financing tools intended to withstand periods of market weakness.

About DeFi Development (NASDAQ:DFDV)

DeFi Development Corp. is a publicly traded technology company focused on building a Solana-centered digital asset and decentralized finance ecosystem. Its strategy includes holding and staking Solana's native digital asset, SOL, as part of its corporate treasury and participating in the operation and development of infrastructure supporting the Solana blockchain.

The company's activities include validator operations, decentralized finance initiatives and the development of software, services and other products designed to support blockchain users, developers and applications.

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