DeFi Development (NASDAQ:DFDV) executives said the company is prioritizing cost reductions, focusing on its core Solana treasury strategy and taking a cautious approach to new capital markets products after a volatile month for crypto assets.
During the company’s monthly business recap hosted by Chief Marketing Officer Pete Humiston, Chief Executive Officer Joseph Onorati and Chief Strategy Officer Dan Kang discussed June operational updates, Solana market activity, the company’s Treasury Accelerator program, a potential preferred equity offering and recently published investor materials outlining DeFi Development’s approach to leveraged Solana exposure.
Executives Point to Solana Activity and Tokenized Equity Volumes
“Still a long ways to go, but obviously really good traction there,” Kang said, adding that momentum in tokenized equities had been “picking up very, very hot.”
Humiston also highlighted broader Solana network activity, saying the blockchain recorded close to 3.8 billion transactions in June, which he described as its most active month ever. He cited tokenization, real-world assets and renewed interest in meme coins as contributors to the network’s activity.
Cost Reductions Remain a Focus
Onorati said DeFi Development continued to focus on reducing costs, particularly legal and accounting expenses, by bringing more work in-house rather than relying on third-party firms.
He said the company had previously incurred significant upfront costs related to accounting, tax and legal treatment for its on-chain activities, including deploying SOL on-chain, running a stake-looping strategy, operating its own validator and purchasing discounted locked SOL.
“That was expensive to set up,” Onorati said. “That’s hopefully part of the cost reduction, right? We had these initial upfront costs to get that off the ground, but to keep it running is much lower cost, hopefully going forward.”
Kang said the company expects to provide more detail on potential savings in its next shareholder letter and additional operational updates during earnings.
DeFi Development Shutters DFDV UK Effort
Kang said DeFi Development had effectively shuttered DFDV UK, part of its Treasury Accelerator program, after regulatory hurdles proved more difficult than expected. He said the initial investment was about 1.7 million SOL, which he described as roughly 40 to 50 basis points of the company’s SOL treasury at the time.
“We don’t like losing money ever,” Kang said, but added that the company viewed the effort as having an asymmetric risk-reward profile. “The downside scenario played out, and we frankly just didn’t lose that much.”
Kang said other Treasury Accelerator efforts, including ZeroStack and Allied Architects in Japan, remain separate examples, but he cautioned investors not to expect the program to become a meaningful growth driver.
“It was never embedded in our SOL per share guidance,” Kang said. “It’s not in our forecasts.”
He said the company’s emphasis would remain on the “DFDV mothership” and preparing for what he characterized as a coming crypto bull market.
Preferred Equity Offering Still Dependent on Market Conditions
Asked about a potential preferred equity offering, Kang declined to provide specifics, citing restrictions on what the company could say. However, he said DeFi Development is watching Strategy-related preferred instruments, including STRK and STRF, closely.
Kang said he would want to see Bitcoin and Solana prices stabilize before moving forward, and suggested STRK trading above roughly $80 would be one possible barometer. Onorati said investors would likely price any DeFi Development preferred instrument against comparable products in the market.
“We’d like to see STRF trade at or around $100 before we would want to take a deal to market,” Onorati said, adding that DeFi Development’s cost of capital would likely be higher than Strategy’s.
Executives also discussed recent volatility in STRK. Onorati said he was “personally not concerned” and described himself as a long-term believer in digital credit products. Kang said he believed much of STRK’s spread movement could be explained by Bitcoin price action rather than by actions taken by Strategy Executive Chairman Michael Saylor.
Company Highlights SOL Boost Framework and Solana Protocol Changes
Kang discussed the company’s recently published SOL Boost Framework, which he said is intended to explain how DeFi Development differs from buying spot Solana or a Solana ETF. He said the company’s strategy rests on two “engines”: intelligent leverage and SOL per share growth.
Kang described intelligent leverage as long-dated, unsecured, non-recourse or low-coupon financing that can provide amplified exposure without the same near-term liquidation risks individual investors may face with margin or perpetual futures positions.
He said the second engine is increasing SOL per share over time through methods such as organic yield, accretive issuance and convert buybacks. “Every action we undertake has to get scored on one metric, which is SOL per share,” Kang said. “If a transaction grows SOL per share, we do it. If it doesn’t, we don’t do it.”
The company also discussed an interactive calculator on its website that shows illustrative five-year return scenarios for DeFi Development compared with other forms of Solana exposure, including ETFs and leveraged alternatives.
Humiston then summarized a company blog post titled “Solana Reborn,” which examined three Solana Improvement Documents:
- SIMD-123: Protocol-native block reward sharing, allowing validators to automatically distribute block rewards to delegators.
- SIMD-550: An accelerated disinflation schedule that would reduce the pace of SOL issuance more quickly.
- SIMD-553: Resource-based fees that would charge heavier transactions more and burn those fees.
Humiston said the changes could make Solana more economically efficient by increasing demand for SOL while reducing issuance and potentially increasing fee burns. He said SIMD-550 may be the most meaningful change, though the impact of SIMD-553 would depend on future network usage.
In response to a community question about closing the company’s market net asset value, or mNAV, gap, Kang said the central issue is whether DeFi Development can grow crypto per share faster than shareholders could grow exposure on their own. He cited intelligent leverage, volatility monetization, organic yield and potential operating business cash flows as possible drivers, while noting that accretive equity issuance is “kind of on pause” for the company.
About DeFi Development (NASDAQ:DFDV)
We are a B2B fintech marketplace connecting commercial property borrowers and lenders with a human touch. We seek to revolutionize the commercial real estate lending market by making it hyper-efficient, transparent, and accessible to all rather than the few. Through our online platform, we provide technology that connects commercial mortgage borrowers looking for capital to refinance, build, or purchase commercial property, including, but not limited to, apartment buildings, to commercial property lenders.
