Summary DFDV mirrors MSTR's strategy by raising capital to accumulate Solana (SOL), aiming for both asset appreciation and staking yield. The company’s business model heavily depends on SOL’s price performance, making DFDV essentially a leveraged proxy for SOL with amplified volatility. SOL’s history of network outages adds significant risk, and DFDV lacks fundamental cash-generating operations to fall back on during downturns. Given these factors, I rate DFDV a cautious Hold, seeing it as more suitable for traders than long-term investors seeking fundamentals. DeFi Development Corporation ( DFDV ) is the latest example of a public company using its ability to raise capital as a way to invest in a portfolio of cryptocurrency, similar to Strategy ( MSTR ), which I've also covered . Just like MSTR, I've rated DFDV a Hold, largely because it's not something I can imagine buying but also because its volatility does make for a steady short thesis either. Recent History Much of what DeFi is stems from very recent actions, after being acquired in April . Shortly after the takeover, the strategy shifted toward forming a digital asset treasury . Specifically this entailed purchasing Solana ( SOL-USD ), as opposed to Bitcoin ( BTC-USD ). After that, they changed from their old name, Janover, to the current one , DeFi, short for Decentralized Finance. DFDV YTD Price History (Seeking Alpha) As of last month, the company announced having up to $107M of SOL. A penny stock at the start of the year, the takeover and SOL accumulation led to huge movement in the stock price, peaking in the $40s back in May. Now about half that, the market is more optimistic about the stock than at the start of the year, but there's a great deal of uncertainty about which price is right for the current prospects. Solana Treasury Strategy The company's investor presentation from May describes the current path, citing MSTR as an inspiration. MSTR effectively leverages its equity to accumulate BTC at a faster rate than they can dilute, creating what they've dubbed "BTC yield." May 2025 Investor Presentation DeFi's idea is that shares of DFDV can be issued and sold, with proceeds to accumulate SOL and thus achieve "SOL yield." May 2025 Investor Presentation As SOL uses a proof-of-history approach, however, holders of SOL can actually earn a yield from this currency through staking, something not possible with BTC. DeFi claims to have an advantage here, compared to others. Thus, there's actually a true yield that their treasury of SOL can earn, plus the less-true yield from cloning MSTR's approach with BTC. May 2025 Investor Presentation Similar to MSTR, they also plan to start issuing convertible securities to accumulate SOL. Future Outlook I don't think DFDV is likely to be investable over time. If anything, it effectively becomes a derivative of SOL, as MSTR has with BTC. May 2025 Investor Presenation As they themselves show, SOL is often just as volatile as MSTR. DFDV therefore has potential to have even more magnified returns than MSTR. SOL 5Y Price History (Seeking Alpha) This can be great on the upside and scary in the other direction. In the last five years, SOL has been worth as much as $250, crashed to $10, risen back to $250, and now currently sits around $145. Some of these declines have been driven by outages in the Solana network, which is a weakness that really doesn't come with BTC, whose second and last outage occurred in 2013 . Solana, meanwhile, has had seven . While patches have been made to protect against this, it's still concerning. Similar events in the future could heavily punish DFDV. May 2025 Investor Presentation At the end of the day, this isn't a company that generates cash flow from a proper operation. Not many companies will be so eager to use the phrase "financially engineer" in their presentations. While they criticize Coinbase ( COIN ) for the limited staking rewards it offers, as an exchange it actually generates cash from a service. It has fundamentals on which it can fall back. DeFi seems like it depends heavily on the market pricing SOL up over time. MSTR vs. BTC 6M Price Returns (Seeking Alpha) As recent price action in MSTR shows us, when BTC is down, MSTR goes down much more sharply. Now imagine a more extreme situation for SOL and DFDV. Would DFDV even be able to stay in business is there's a serious enough setback? It's worth considering. May 2025 Investor Presentation While the SOL NAV was only $106M in May, the current market cap of $365M. The company has also not announced anymore SOL purchases like they had prior to that, so unless they decided to change that policy, it seems like the shares are at a premium and only have upside if they succeed in the strategy. Conclusion I think we're going to see a lot more companies forming "treasuries" of cryptocurrencies in order to create "crypto yield," whether it's a currency that produces actual yield like SOL or not. Over time, some of these companies may do well, but I don't see a compelling case to buy as I would stock in a company with ordinary operations. This is why COIN is the only crypto investment I've ever rated Buy. DFDV seems like it's more situationally useful for traders. For that reason, I give the stock fairly cautious Hold rating.