Thank you, everyone, for joining us. My name is Mike Andrusko. I'm a Partner here at Centri, Leader of Fintech and Digital Asset Practice based out of Philadelphia area. I have joining me here today Daniel Kang from DeFi Development, Chief Strategy Officer. We're going to kind of do a little fireside chat, learn a little bit more about DFDV and their Solana strategy. Daniel, I guess to those who are unfamiliar with the DFDV story and what do you guys do exactly, right? If you're kind of doing the elevator pitch here, let's say we'll all sort of bottom floor here, let's level set. What do you guys do, and why did you guys decide to initiate a Solana treasury strategy? Yeah. First off, thank you so much for having us, Mike and Centri. We really appreciate the opportunity. The pitch I've been giving people for a while is actually Solana on steroids, and there are probably a lot of folks who are unfamiliar with what Solana is, so we can take a step back and go into that. DeFi Dev Corp was actually born from an idea Joseph and Parker had, our Co-Founders and CEO and COO respectively, just over a year ago, to effectively launch a digital asset treasury company. The story I tell people was when they actually pitched me on DeFi Dev Corp, I told them it was the dumbest idea I had ever heard of. This was February of last year. And fast-forward about a month and a half later, and I was actually let go from my prior employer, Kraken Crypto Exchange, where I'd met Parker and Joseph and worked with them for many years. So it turns out, when you're unemployed, you're willing to do really stupid things. So I joined DeFi Dev Corp to help them raise their initial $42 million convertible round that kicked this wild trend off. And with that, we became the first Solana digital asset treasury company in the United States. Actually, the very first non-Bitcoin treasury company in the United States. And proud to say that I was very wrong about this being a dumb idea. We've actually, since inception of the strategy, delivered about 600% equity returns since early April of last year. And certainly the only Solana digital asset treasury company to deliver positive equity returns since inception. What is Solana? I tell people it's probably the biggest, highest monetizing network most folks in traditional finance haven't ever heard of. The punchline I give is, if Bitcoin stores value, Solana moves it. It's really best-in-class infrastructure for insert your financial use case here, whether it's B2B payments, peer-to-peer payments, cross-border payments, spot trading, a whole host of things that you can actually do on the network. Rather than bog you guys down with the specifics of the technology and go into a crypto nerd rant, the specifics that I hone in on are fractions of a cent to actually conduct a transaction on the network, and as fast or faster than Visa. Right Particularly during times of high network congestion or activity. Why did we choose Solana? Well, I would say it was really a combination of tactical and fundamental, and I start with the tactical one first, which is we often got asked during our convertible fundraising round last year, "Why are you choosing SOL versus Bitcoin?" There's a model out there with Strategy and Michael Saylor that shows this can actually work very well with Bitcoin. What I told people was, "If I handed you a football and asked you to run it down a football field, would you want an NFL linebacker standing right in front of you, or would you want the football field to be wide open?" Michael Saylor and Strategy, in this analogy, they're the NFL linebacker. We chose the open field, right? The Bitcoin treasury strategy playbook had largely been won, in my opinion, by Strategy at that point, and we didn't want to go head-to-head with them. That left us with a whole host of other crypto assets to choose from. For all the reasons I mentioned, Solana felt like the logical choice. It's, call it 4%, the market cap of Bitcoin, a fraction of the market cap of Ethereum as well. Despite having more usage, more revenue generated, more daily active users, more developers on the platform, it just felt like there was a very large disconnect between the fundamentals of the network versus where the token was valued at that time and even still today. Mm-hmm. That's a little bit of the genesis of the DFDV story. Yeah, no, that definitely helps kind of frame the rest of the conversation well, kind of where you guys started and kind of how you kind of came to that strategy, right? Since DFDV has launched, right, a lot has changed, right? Digital Asset Treasury strategy companies have come out to market. You have a lot of Solana ETFs that have been approved. There's definitely greater regulatory clarity than we've ever had in the space. No shortage of ways for investors to get exposure to Solana, but what is the value prop that DFDV kind of brings where just kind of going to a SOL ETF or maybe just spot trading SOL themselves, how are you kind of beating out that alternative? Yeah, it's a great question. A lot of my background before getting into crypto in 2022, where I was at Kraken, was actually in traditional finance. Mm-hmm. I spent about eight years in long-short equity, covering TMT stocks. I did about two years in Morgan Stanley in their credit risk department right out of college. I took a very fundamental approach to trying to understand Strategy and what they had done, particularly as I was getting up to speed on what Parker and Joseph's vision was for DFDV this time last year. One of the early misconceptions that I had about Strategy was the idea that they were purely a play on investor access. Mm-hmm. What I mean by that is they kicked off their treasury strategy in August 2020. For quite some time, they were really the only pure play, like equities play on Bitcoin exposure. There was certainly a narrative that once the Bitcoin ETF started trading, that Strategy's multiple to net asset value would compress, they would have no value proposition anymore. In fact, quite the opposite happened, like the Bitcoin ETF started trading on January 11th. From January until mid-2024, Strategy's multiple to net asset value actually materially expanded. That to me was a huge proof point that the value proposition of a digital asset treasury company is not purely tied to access to the underlying, right? There has to be something more here. The metaphor I've given people that I've settled on is you can think of buying a spot asset or buying an ETF like sitting on a life raft on a river. Now the river's the price action. Wherever the river takes you're going to go. Buying a Digital Asset Treasury company or a DAT is like buying a speedboat on a river. You still get the benefit of the price action, you get the benefit of the current, but you can accelerate, you can decelerate, and an investor's job is to pick the fastest boat that's going to get them to their destination, and a boat that's not going to sink when the waters get choppy, right? Right. You need both. I think what this speaks to, metaphor aside, is the fact that Strategy has outperformed Bitcoin, by a magnitude of 1.5x, give or take, over the call it last five years. This is because their underlying Bitcoin per share has actually grown over time. It's a similar story with us. The reason why our equity materially has outperformed SOL since the inception of our treasury strategy is because our SOL per share, albeit off of a very small base to start, right, has grown quite considerably over the last 12 months. The idea here is not just access to the underlying, but can that team that is running that digital asset treasury company actually compound your exposure on a per share basis? Gotcha That's effectively our North Star is SOL per share growth, which is called the equivalent of Strategy's BTC yield. Perfect. No, I like that boat analogy as well. Now, you have kind of the Bitcoin maximalist strategy on the MicroStrategy side of things. You guys are on the Solana maximal side of things. What was the other kind of pain point or decision point or fork in the road that led you to just choose Solana versus some sort of basket of comparable assets? Yeah, good question. I'm also going to say it was probably a two-pronged approach here. Mm-hmm Which is again, tactical and fundamental. The tactical one is, how many people here can actually know what Solana is, by way of hands? There we go. That's battle number one. Mm-hmm It already takes a while to explain Solana. Right To people from a very simplistic lens and help them peel back the onion. I find as an industry in crypto, we've done a really terrible job of that, right? We start talking about the tech. The metaphor I've given people in the past is imagine if I went to pitch you on Netflix. Instead of just telling you 20, 30 years ago that Netflix is going to be the ability to stream TV wherever you want, whenever you want from any screen, I went and I started diving into all the tech. Mm-hmm. I said, "Well, the front end is going to communicate with the back end. Yeah. Like an AWS reload balancer is going to go and send data over fiber optic cables under the ocean. Like you would've lost most people right there. Most people don't care about the tech. Right. They care about the outcomes that it enables. We tried to do the same with Solana, which is again, focused on just how performant it is. Mm-hmm How fast it is, how cheap it is, what people are actually building on this thing today. That is a helpful lens for people, but it still requires a little bit of explanation. Right. Now imagine if I had a basket of five other cryptocurrencies there. That's fair. I had Ethereum, I had SOL, I had Bitcoin. Now my job is not just to explain SOL on steroids. One thing, right. Oh, it's really a little bit of SOL here and it's some ETH here. Let me tell you about Ethereum now, and let me tell you about Dogecoin or whatever else is in the basket, right? Your education hurdle becomes much, much harder. Correct. That is the punchline. The other component that I say is if you are really a believer in something. Mm-hmm We're huge believers at DeFi Dev Corp of just concentrate your bets. Yeah. We really wanted to concentrate our bet on Solana. Yeah, I can appreciate that. When you kind of focus more on the depth of knowledge and depth of that strategy versus breadth, right, you're going to have a lot more success in that depth. Yes. Exactly. I want to talk a little bit about ecosystem participation as well. I guess from your standpoint, what does that really mean in practice? DeFi Development right now, how does their treasury approach differ from that of a typical cryptocurrency treasury strategy? Yeah. This is a fantastic question, and actually was one of those eye-opening moments for me in the early days when I was doing work on digital asset treasury companies, and is probably why I was so bullish on Solana to begin with, as a treasury asset. For those who are, I'm going to say, maybe more familiar with how Strategy has traded, there's a concept of multiple to net asset value, right? I've called this the dynamic of being able to sell someone a $200,000 checking account for $400,000, right, which is an absurd notion when you sort of frame it that way, but that is what has kind of happened with all these. Right Digital asset treasury companies historically, Strategy being the sort of poster child for it, which is they always traded a premium or have consistently traded at a premium. Mm-hmm To their underlying crypto holdings. There's a little bit of a recursive argument here. If we go back to the speedboat analogy, the reason the premium exists is because the market expects more Bitcoin accumulation over time in Strategy's case, right? The Bitcoin accumulation, in large part, was only made possible by the multiple to net asset value. It's that thing that your intern plugs into Excel and it gives you all the errors or whatever and breaks your model, right? It's a recursive argument. Right. By choosing Solana as your treasury asset, we are still able to take advantage of that recursive loop when it exists. Mm-hmm Because we have traded at a considerable premium to net asset value, particularly relative to peers in the space, we are also freed from that recursive loop because we can deploy our Solana across the rich ecosystem of projects that exist on the network today. Right. In our case, we actually even own our own validator infrastructure. Mm-hmm. Which means we can take our treasury, stake it to our validators. For those who are unfamiliar with the nomenclature, you can think of this as effectively owning your own Bitcoin miners, right? In this case, on a proof of stake network, it's Solana. I say it's almost like owning Bitcoin miners in that the unit economics do not suck. The unit economics are far, far better, right? Call it tens of thousands of dollars maybe. Right Fixed cost up front, and then from there it's not really an energy-intensive process. What we've said is that every additional delegated stake that we get, whether it's via our own treasury or third-party delegated stake. Mm-hmm Is effectively 100% pure incremental free cash flow. Yeah. All this to say, we have an organic component to our business that allows us to keep growing our treasury. Even if we never raised a single cent of capital again today, we'd be able to grow our business by, call it, anywhere from 8%-11% on a go-forward basis annualized. That is an important, I'm going to say, variable that allowed us to be free of that constraint from the, I'm going to say, typical digital asset treasury model. Right. Okay. Now as we kind of continue to talk about that ecosystem participation, how do you assess the risk of the plethora of different opportunities that are out there, whether that be, and I won't mention any of the exchanges because I know it's proprietary, the DeFi strategy that you guys currently deploy? Right As well as looking at the off-chain side of that as well and from a capital raise standpoint. Yeah. Good question. I'll take those separately. On-chain, what you're really dealing with is smart contract risk. Yep. This is just a fancy way of saying, if I deploy into a lending protocol over here, if I deploy into another protocol over here, what is the probability that there may be some exploit such that I lose the tokens that I've designated into those protocols for forever? Even though we have all our eggs in one basket when it comes to Solana, we certainly do not put all our eggs in one basket when it comes to deploying on-chain. Yeah. Disclosures we've given, more than 15% of our treasury is deployed on-chain today. You can imagine that might mean 20%, it might mean 25%. It doesn't mean 50%, right? The disclosure is more than 15% of our treasury is deployed on-chain today, and that is fairly well diversified, right? It does not mean 15% is all in one protocol and, should there be an exploit there, that we would lose. Right The entirety of that balance. Really in the worst case scenario, what you would need is an exploit at every single one of those protocols where we have deployed. Mm-hmm In order for us to have that greater than 15% balance put at risk. Got you. We think that is an important differentiator, right? We are crypto experts. We know where to find the right risk-adjusted yield. We know not to deploy in a contract that was spun up yesterday and telling you that you can earn 100% yield or something like that, right? Right. You can exercise some common sense there. We can also deploy and move very, very fast. Right. An example of this in practice is there was a strategy we deployed on-chain in Q3 that was very profitable for us. It effectively allowed us to generate an incremental 100-150 basis points of net interest margin on our SOL. On October 10th, when everything nuked in crypto, that strategy quickly became unprofitable for us. Right. We were able to wind it down fairly quickly. Mm-hmm. It's not like it was a drag on our organic yield. Right For the entirety of the quarter. I think organic yield is really a function of our expertise, some common-sense risk management. On the off-chain side, look, I've said we're SOL on steroids. What this really means is we're not afraid to take on leverage, particularly in a bear market, and I sort of view this as coiling the spring for when Solana prices effectively do come back. Right The rest of crypto market cap. You have to take on intelligent leverage, as Michael Saylor would say. Right? What is unintelligent leverage? Taking on a short-term margin loan that could get called if SOL drops 30%. That's a pretty bad idea. Yeah. We've all gotten enough scars and wounds in bear markets to know that that's not the kind of thing that you do. Again, if the value proposition of a digital asset treasury company is to compound the crypto exposure over time, you never want to be in a position where that balance, the SOL per share, the total SOL, is going in the opposite direction, right? Opposite. If you look at our convertible debt today. Mm-hmm As it stands, all unsecured. Yep Low coupon, five-year duration, that would effectively allow us to weather a prolonged bear market. We think, again, this is like coiling the spring for us being able to really equitize our business as crypto. Mm-hmm Coming back and as mNAV start coming back. Understood. Kind of building off that diversification, I know we've been recently talking about a new arrangement you guys are looking at from a protocol standpoint with Apyx. I guess, talk to us a little bit about that. What is this? Why have you chosen to dive into this new protocol? To the extent that you can prior to the filing, what else can you tell us? Yeah. I'm really excited about Apyx. Yeah. I'll take a step back and answer one thing first, which is kind of a probably helpful backstory to this. Mm-hmm. Which is when we set out to do this, our logo at DeFi Dev Corp was actually a bridge, and we made this deliberately. The idea was to bridge traditional finance, TradFi, and DeFi. For a while, we said we wanted to bring TradFi capital into DeFi, and DeFi yields into TradFi. All of the, I'm going to say, other bets and strategic initiatives that we've taken on have been in the spirit of this, whether it's deploying our treasury on-chain. Mm-hmm Whether it's an initiative like our Treasury Accelerator that we announced last summer, which is an initiative in which we help other teams launch Solana digital asset treasury companies in ex-United States regions. Apyx very much fits this bill. What is Apyx? DFDV made a strategic investment in Apyx, small amount, call it less than 1% of our treasury. Apyx is a dividend-backed dollar, digital dollar, that effectively has, as its collateral basket, digital asset treasury preferred equity. Right. There's really one market for this today, which is STRK. Right? For those who are maybe following the space, STRK is what Michael Saylor would call the crown jewel of his preferred equity stack, with about $6.3 billion of notional outstanding, yielding 11.5% dividends paid monthly. Did about a billion and a half of volume last week. Mm-hmm. He ATM'd about $1 billion into that billion and a half of volume. Right. Yesterday alone, it was $1.1 billion of volume. This morning, 20 minutes into the open, was like $420 million of volume. He seems to have captured lightning in a bottle with this. I raise this as important because for a while, the idea of bringing TradFi capital and liquidity on-chain has obviously been a core part of what we want to do. This is really the first time we're bringing a TradFi yield product on-chain. Right. Now you're getting sort of the best of both worlds. We have something that trades like water in our collateral basket, and that we are able to, I'm going to say, bring into DeFi, and it sort of completes this really nice virtuous circle of Bitcoin powering STRK powering DeFi. Right Bitcoin really permeating throughout Decentralized Finance. We invested in it. We're very excited about the early traction. We passed $140 million of apxUSD, that's the stable token. Mm-hmm Supply fairly recently. Again, this thing's, call it just a few weeks old. Right. It's been very strong early traction. And mechanically, the way it works is, it's a two-token model similar to Athena, for those who follow crypto. You lock your apx USD, the digital dollar, you receive a yield-bearing token, and we're able to pass the STRK dividends and other DAP preferred equity dividends onto the APY, the yield-bearing token holders. Right. How does this benefit DFDV? You can imagine a world where DFDV issues a preferred equity instrument in the future. We do have an S1 outstanding for that we filed with the SEC. No comments on timing for that, but given the nature of this project, we feel our preferred equity could be a candidate for this collateral basket in the future. Particularly given our strong organic yield, which again separates us from Bitcoin DATs and their ability to pay preferred equity dividends, we actually have some kind of revenue or cash flow to meet said dividend obligations. We think from a, call it digital credit perspective, we'd have a unique offering here. All I can say is stay tuned. Yeah. That's a great way to differentiate yourselves from the other Digital Asset Treasury companies that are just holding the asset, not really doing much with it. When you're really kind of just relying on the unrealized, realized gains and losses from the fluctuation of the price, when you're leveraging that out and kind of having these other looping strategies on top, it gives a little bit more credence to that revenue strategy. Yeah. Absolutely. I know we only have a couple of minutes, and I know we have more questions, but I want to open it up to the floor for any follow-up questions. If not, I got some more to throw at him here. What are your thoughts on the current crypto legislation and what it's doing to the ecosystem? I'd love to hear what you think. We oppose the Clarity Act. You do? do? Okay. Because? This is a very. Do you not have enough time? I certainly do not have enough time. Yeah. Certainly for ideological reasons, if you know anything about the history of our company, our CEO, Joseph Onorati, was CEO of the first Canadian Bitcoin exchange. I'll just say he's been in it for this long and has very deep thoughts about, I'm going to say, asking permission from the government. I think just purely from that lens, he has taken a very strong stance that we're opposed to anything like this. Got it. Thank you. Of course. As I heard, you deploy Solana across all different mechanisms like DeFi lending and all this yield-generating mechanism. Just wondering how you as a DAT company manage the risk. As I may say, in 2025, we have a lot of financing, like PIPE or ELOC, and what's kind of your capital market picture for 2026? Yeah. Good question. Those are good questions. Good job. Managing DeFi risk. Again, I alluded to this in an earlier question, but it's a little bit of exercising common sense for sure. You don't go and deploy 50% of your treasury into one protocol or something like that and have all your eggs in one basket. There's certainly an element of we've been at this for quite some time, so we know a lot of the teams that operate in the space. We know who the sophisticated operators are. We know where yields are attractive on a risk-adjusted basis, and we know where the yields are probably too good to be true for us to really deploy there. As far as future financing, look, I think it makes sense that given where mNAVs are today across the entire space, that we're probably shying away from aggressive equity issuances at these valuation levels. That we wouldn't shy away from taking on additional leverage, again, if the terms made sense and didn't jeopardize the, I'm going to say, long-term viability of the company. We've been pretty explicit that a preferred equity offering is top of mind for us and a top priority. No comment on timing, but we expect that to be an attractive instrument at some point in the future. Perfect. All right. We got one more minute here. What would a successful execution of all these strategies look like for you guys in the next 12 months-24 months? 12-24 months, my baseline expectation, with the caveat that this is not a forward-looking statement, I would hope that we're measuring our treasury in the billions of dollars rather than the hundreds of millions of dollars. Right? We've already shown since inception that our equity trades like water on an ADV to market cap basis. Right. We've already shown that we can grow our SOL per share. Of course, we want the optionality associated with just a really big treasury. We have, effective as of March 31st, guided to one SOL per share by December 2028. Part of the path to getting there is getting to billions of dollars of SOL. Absolutely. Well, here's to the next 12 to 24 months. Appreciate the time. Thanks for taking it with us. And thank you, everybody. appreciate it, Mike.