DeFi Development Corp Q3 2026 Earnings Call - CHAD Hits Par in 48 Days as SPS Grows 20% and the Leverage Engine Starts Working

Pete Humiston, CMO, DeFi Development Corp: All right. GM, everyone. Welcome to today’s Spaces. I am Pete Humiston, CMO here at DeFi Development Corp. Thank you all for joining. Today is our October and third quarter 2026 business recap and AMA. Joining me today is none other than Joseph Onorati, CEO, John Han, CFO and newly appointed COO, and Dan Kang, CSO and Head of Investor Relations. We are going to spend some time today talking about what happened in October, as well as touch on our third quarter earning results. Lastly, discuss how we are thinking about the business in light of current market conditions, volatility in the Nasdaq and crypto, and what lies ahead for the company. As always, for those of you who have questions, drop them under the pinned tweet, and we will try to do our best to get to as many as possible.

Quick reminder that today’s discussions may include forward-looking statements. These involve risks and uncertainties that could cause actual results to differ materially. Please refer to our SEC filings for additional information. We undertake no obligation to update these statements except as required by law. With that said, let us get into it. Joseph, John, DK, GM, how are you guys doing?

Dan Kang, CSO and Head of Investor Relations, DeFi Development Corp: GM. Doing well.

John Han, CFO and COO, DeFi Development Corp: Yeah, doing well.

Pete Humiston, CMO, DeFi Development Corp: Good. Good to hear. Awesome. Well, guys, there’s a lot that’s been going on as of late, and especially in Q3 and October too. First off, let’s just dive right into it. Earnings, we just reported this morning. SPS grew north of 20%, NAV per share up over 4x. Our cash position doubled quarter-over-quarter. CHAD was issued. Lots here to unpack, but what were some of the highlights for you guys in the quarter, and what was it that led to the outperformance?

Dan Kang, CSO and Head of Investor Relations, DeFi Development Corp: Joseph, you want to take that?

Joseph Onorati, CEO, DeFi Development Corp: Oh, yeah. Sorry, I was muted. I even said GM earlier. I think the two most important things in the quarter were the SOL price move from 70 up to 120, and then that we IPO’d CHAD. On the SOL price performance, I mean, we saw the kind of coiled spring effect play out for DFDV, and we spent a lot of time talking about this structure for our business, earlier one. So, we have DFDV’s leveraged exposure to Solana, but the leverage that we hold is what we call intelligent leverage. So, our debt is long-dated. The converts don’t expire until 2030, or the larger convert doesn’t expire until 2030. CHAD, the new variable rate perpetual preferred instrument that we launched is perpetual. It’s unlimited duration capital. We only have to pay the dividend, not the principal.

Both of these sources of leverage are unsecured, so there’s no margin call level. There’s no price at which we get liquidated, like if an individual was trading on margin or on a perpetual swap market. So we can hold a levered SOL position through a significant drawdown. When that happens, when SOL goes down, our leverage ratio or our amplification goes up. We kind of saw this play out sort of in both directions, so recently. When SOL moved from 70 to 120, DFDV outperformed SOL on that move. In August, we outperformed SOL by about 3x. For the Q3 overall, we outperformed SOL by about 1.5x. So, that leverage exposure to SOL that DFDV common is intended to pass on appears to be working, or worked in this example.

I would anticipate that it works in the- This is price goes down, which is where the coiling the spring saying comes from. Now, back to CHAD specifically. We think the price move from $70 to $120 supported the IPO of CHAD, which is, in my opinion, the biggest highlight of the quarter. We have been talking about getting a variable rate perpetual preferred out for some months now, so it was awesome to get it out. Then, of course, since the IPO of CHAD, it has traded to par. It was the fastest digital credit instrument to trade to par ever, and it has traded around 10 since it initially hit its par value.

The company has been able to issue some additional CHAD, and we intend to continue issuing more at $10, which is the whole intention behind the instrument, for us to raise additional capital to have the capability to grow our intelligent leverage and maintain or increase amplification depending on market conditions, right? If SOL rips, it is going to be very hard for us to maintain that high amplification, but we will do what we can.

Pete Humiston, CMO, DeFi Development Corp: Awesome. Thank you for that, Joseph Onorati. Speaking of CHAD, you kind of alluded to this, but I would love to dig a little bit deeper, and I will throw this one at John Han, and feel free whoever else wants to follow up. But one of the highlights of CHAD is that it closed at par in 48 calendar days after trading, first going live in trading. So that made it actually the fastest digital credit instrument to reach par to date. John, would love to hear, what do you think are some of the driving factors behind that?

John Han, CFO and COO, DeFi Development Corp: Yeah. Thanks, Pete. And fantastic question for whoever asked this. Yeah, I mean, the 48 days is really telling because that just shows that Strategy and Strive and others have done a fantastic job in terms of educating the market on what a variable rate perpetual preferred is. I mean, it is a mouthful, but they have condensed it into something that is very easy to understand for a lot of retail and institutional investors. So frankly, we are walking on the shoulders of giants here, and we are very grateful for all the work they have done to pave the road here. So yeah, currently we are sitting at 14% daily dividend payments, and it looks like a lot of the investor base seem to really enjoy that. This is really being supported by the organic yield from Solana and other operations that we do in terms of in-house staking and on-chain operations.

That is quite unique for us because Solana is a natural chain that produces additional yield, which we think is to our benefit. Currently, as you guys have seen on the website and also in our investor letter, our organic yield already covers the total aggregate CHAD dividends by approximately 5x. All assets together cover CHAD dividends for over 100 years. We are still in the early stages of CHAD, and we are very excited about what the volume looks like. One is, obviously, how quickly CHAD pegged to $10 or grew to $10, or par, I should say.

Second is just how much volume we have seen at these levels, because incrementally what that means is more and more retail and institutional investors can get access to CHAD at $10, but also that capital is used to purchase additional Solana and do on-chain activities, which further increases, obviously, the Solana balance, but also the additional yield in aggregate. Super exciting times, and that yield obviously covers in part some of the CHAD payments and things like that. It is a fantastic virtuous cycle. The beauty of CHAD versus a common ATM is that it is non-dilutive to DFDV common shareholders, which is fantastic. Super, super exciting times. Obviously, these instruments have not existed for very long. Frankly, it has been almost two years now, so I think we are still in the very early stages.

I suspect many other companies outside of digital asset treasuries will also be launching some of these. Very exciting times. Thanks.

Pete Humiston, CMO, DeFi Development Corp: Exciting times indeed. Lots of focus for us internally, and even from a marketing standpoint on CHAD, but that is not to say we have not forgotten about DFDV, the common equity. I guess with that said, given that we have been talking a lot about CHAD and DFDV still has its place, guys, I would love to dive a little bit into the difference between the two, more so in the context of, is there a specific investor type or investor profile that is perhaps more attracted to CHAD versus DFDV? How do we make sense of that?

John Han, CFO and COO, DeFi Development Corp: I think DK mentioned his internet just went out. Joseph, do you want to go for it or I can?

Joseph Onorati, CEO, DeFi Development Corp: Yeah, I can take it.

John Han, CFO and COO, DeFi Development Corp: Sure.

Joseph Onorati, CEO, DeFi Development Corp: On the investor profiles for CHAD and DFDV, we’ve really tried to market these products differently. DFDV common is intended to be leveraged exposure to Solana, long-term, safe, leveraged exposure to Solana, safer than one could get participating in, say, a margin loan or a perpetual swap trade or a levered ETF. The goals for the common are to provide amplified upside and amplified downside exposure to the price of Solana. That instrument ought to appeal to investors who want to take a view on SOL, investors who are bullish on SOL, especially in the long term. I think it’s probably a little tough to speculate in the short term, but one could use DFDV Common for that as well. For CHAD, we’re kind of mixed, I think, on how we launched this versus how we want to market longer term.

The longer term focus for CHAD is an income investor. Our kind of ideal holder would be somebody who buys it and wants to hold it for a long time, get exposure to the dividend, and wants to earn the yield. Our goal would be that the investors don’t actually have to have a knowledge of or a view on how SOL’s going to perform in order to participate with CHAD. We’ve tried to position our marketing in that way. Of course, some of it we market to crypto investors, people who are already familiar with Solana and DFDV. But the longer term intention with CHAD is to bring in totally new investors and a much larger total addressable market of potential investors. To achieve that, I think we need CHAD to be stable.

So, the company intends to, I don’t know, act to have CHAD trade around $10, right? This is in our prospectus, et cetera, where we can raise the dividend. The board’s also approved a buyback program on CHAD where we can actually buy back the entire issuance of CHAD if we concluded that that was in the interest of shareholders. Of course, there’s no short-term intention to do that. It’s just one of the tools in the toolbox to have CHAD kind of fulfill its purpose. That’s really kind of the target split. One’s leveraged upside to, or leveraged exposure, I should say, to SOL, and the other is intended to be a long-term income instrument for investors who want more stability and yield, but give up the upside exposure to Solana.

John Han, CFO and COO, DeFi Development Corp: Just adding to that super quick. I think Joseph hit the nail on the head. I mean, these two are the barbells of frankly everything that exists in terms of investors, right? On one side, you have the common equity, which is leveraged exposure to Solana, which is volatile, and so it’s volatility times two or times whatever the multiplier is at any given point. That is a extreme type of investor who believes in Solana, who believes in the upside, and wants that amplified volatility, which is perfect.

The other type of investor is the one that wants very stable income, just like Joseph mentioned, and this is a perfect product/instrument for them, because with each passing day, they look at the stock, the more it is closer, stable at $10 or close to there, the more confidence I have, everybody has, in terms of just that being stable, and therefore, it is self-fulfilling in many ways. It strengthens with each passing day, because you can mark another day as it paid the dividend, and it’s still close to the $10 peg. I should say par. Those two very different types of instruments is very, very positive, because they capture kind of the whole universe of people who may be interested in Solana and even beyond Solana.

Pete Humiston, CMO, DeFi Development Corp: Awesome. Thanks for providing that additional context, John. Super helpful. Joseph, thanks for the answer as well. Guys, moving on to some other questions that we got. Joseph, I’ll throw this one at you as well. Staking and on-chain operations. Important part of the CHAD coverage story, kind of touched on this a second ago. Where do you see the opportunities to grow that recurring income, and how do you decide whether the additional yield justifies the risk?

Joseph Onorati, CEO, DeFi Development Corp: Yeah, thanks. I think this is a good one. We spent a lot of time on this internally. I do not remember what month it was, but earlier this year, we scaled back, or I guess simplified really, our on-chain operations. Prior to whatever that time period was, DFDV participated fairly broadly in Solana DeFi. We ran and continue to run a stake looping strategy. We have dfdvSOL, which is an LST by Sanctum that we have adopted. We are still continuing to do that, of course, but we would explore a wide variety of opportunities to earn yield beyond the stake rate. Since that focus on simplification, we have kind of scaled back, and now the primary or dominant strategy, almost the only strategy we are running, is stake looping strategy.

We stake our SOL into dfdvSOL, and then the dfdvSOL is used as collateral on Kamino or Jup Lend, maybe smaller amounts across other lending platforms on Solana. Then, we borrow SOL against it because our validator is a high-performing validator. We can collect kind of a net interest margin, and it is referred to as looping, where you run that trade a few times through. That pushes up our stake rate, like our yield on staking significantly. That is our primary strategy. We have been running this one basically since we pivoted the treasury strategy of DFDV, I do not know, a little over 18 months ago. We think this is safe. We understand the risks very well, and I think that we have done a good job of kind of mitigating or controlling for them, hopefully. The risk return for us is positive there.

Then how we evaluate other strategies, since our focus on simplification, which is to some degree driven by accounting, just accounting for this stuff is complicated inside a public company with the accounting memos and auditor comfort around the systems, and even the just accounting tools to keep up with these things are challenging. We have just pared it back, the marginal return to other activities, once you net all that stuff out, was, we thought, pretty low. So, we are focused on the stake looping strategy. Now, about

Pete Humiston, CMO, DeFi Development Corp: Challenging to do that because we

Joseph Onorati, CEO, DeFi Development Corp: and the lending markets. We are always looking for additional lenders of Solana at rates that are good enough for our strategy, which is a challenge, but it is part of the process. And of course, we kind of have the, I do not know, partners or vendors, the lending markets where we are in communication with the teams there to try to source more capital or change limits or find ways to cooperate together where it is accretive to both parties.

Pete Humiston, CMO, DeFi Development Corp: Yeah, just to reiterate too, the staking component of CHAD is really, really interesting and what kind of it unlocks for us, or excuse me, the staking component insofar as staking yield earned on our SOL balance and having that be able to cover CHAD, definitely a different point of differentiation relative to peers, and I think something that is perhaps a little bit underappreciated. Go ahead.

Dan Kang, CSO and Head of Investor Relations, DeFi Development Corp: Yeah, Pete, I just want to add one thing on this point. I mean, it was something we highlighted in the letter and that John touched on, but the sensitivity analyses that we run on CHAD from a "credit coverage perspective" were, I am going to say, deliberately conservative from the income generation side, right? Like, we assumed 5% in our shareholder letter, even though historically we have been, I want to say, like, well above the Solana-based staking rates. It is called by a magnitude of 200 to 300 basis points. So to the extent that any incremental SOL acquired from CHAD is going into stake looping strategies, you can imagine that that only helps further expand those coverage ratios.

Pete Humiston, CMO, DeFi Development Corp: Yeah, excellent point. Thanks for adding that. Cool, guys. Got a few more here. Another question. "Thanks for the third quarter letter. Could you share absolute SPS levels under the new net method for August 12th and September 30th so we can compare periods? And will it be used consistently going forward? Also, why exclude convertibles in the denominator when Strategy includes in-the-money ones?

Dan Kang, CSO and Head of Investor Relations, DeFi Development Corp: Yeah, I can take that. We actually laid out all the calculations in the letter to get to the absolute levels. You can read them in the additional disclaimers as well. What I would highlight is, the methodology is more or less presented in this letter as consistent with Strategy’s, with one caveat, or I guess I would point to two caveats. The first is that Strategy, or DFDV rather, does not have any of its convertible debt currently in the money, right? So definitionally, that means from a share count perspective, that wouldn’t be included in the denominator, but it would detract from NAV as it gets treated as debt.

Secondly, which we thought was important to do or highlight, we thought it was actually kind of important to take a look at what we call "constant currency" "SPS growth" in this scenario, because we have so much of our cap structure denominated in fiat, i.e. the convertible debt that Joseph was talking about earlier. It can really, on a net SOL per share basis, really fluctuate the price of SOL. So the extent that you can isolate what were the things that we did in the quarter that were independent of SOL price, I get that’s "independent" in big quotation marks, right? Because you can’t really isolate the business entirely from the movement of SOL. But we wanted to at least present some view, or rather both views, so that you could see the impact of SOL price appreciation.

Ex that, if you just kept SOL price constant, as we disclosed from August 12th to September 30th, SOL per share grew north of 20%. Then, if you actually account for the price impact as well, it was well into the triple digits. So, hopefully that gives a little bit of a sense of the methodology. It’s just one methodology, right? There’s a number of ways you can cut this, like, call it ordinary SOL per share, fully converted, which we’ve talked about in the past as well. We thought this was, I’m going to say, at least a helpful assessment or benchmark given the changes that Strategy made recently.

Pete Humiston, CMO, DeFi Development Corp: Great. Thank you, DK. Guys, couple more here before we close out. Looking forward from here, what is the biggest growth opportunity for DFDV?

Joseph Onorati, CEO, DeFi Development Corp: Yeah, I can take that. Yeah, I think the biggest growth opportunity is just, like I said earlier today, walking up the mountain with CHAD. CHAD’s working, right? It’s early, but it’s working, and it’s playing out according to the strategy that we put in place, right? We launched with a small issuance. The small issuance, I think, allowed it to, or supported CHAD trading to par fast.

The stock has fairly consistently bumped around $10 since initially trading to par. It’s just going to take time, but I believe, hope that we’re going to be able to issue additional shares of CHAD. As we do, the liquidity will grow, and the rate at which we can issue, I expect, will increase. We also have other options available to us to grow CHAD. A couple of kind of highlights or ideas. One is, we could swap convertible debt for CHAD at $10, which Strive has done, right? They swapped their convert for their pref. I think that’s interesting depending on the price of the convert, which would grow the issuance and then likely the liquidity and potentially the ability for us to grow CHAD in the future.

For now, I just want it to organically grow, but we’re open to that option in the future. The other kind of big unlock, I think, is just yesterday we announced the first integration for CHADx, the tokenized version of CHAD, tokenized by xStocks, a Kraken company. CHADx traded over $1 million of volume on Orca yesterday, a decentralized exchange on Solana. We, well, not we, but Exponent, an interest rate trading platform on Solana, listed a CHADx market. Investors can essentially speculate on the dividend rate that CHAD will have, along with the ability to get points from xStocks and their potential upcoming token launch. I haven’t looked just now, but this morning, the rate on Exponent that you could lock in for the duration of the contract, I think it’s around three months, was over 20%.

This morning, anyway, an investor could go on Exponent and lock in over 20% yield on CHAD. The volume that we saw on Orca and the integration with Exponent, I think are just the beginning for where CHAD can go on-chain. We’ve saw much more success for STRCx, Strategy’s variable rate perpetual preferred on-chain. I think CHAD being kind of Solana native and higher yielding has got potential to drive even more adoption, and the indicators are positive based on the last couple of days of data here. I’m really optimistic there. Just to put this in perspective, CHADx, the tokenized version of the stock, traded about three times the volume on-chain as it did in the traditional market yesterday. If we’re able to keep that up, that’s, I’d say, punching far above our weight, right?

This is a meaningful percentage of the total issuance turning over in a day for an asset like this, which is fantastic.

Dan Kang, CSO and Head of Investor Relations, DeFi Development Corp: CHAD doesn’t seem like he’s walking up the mountain, Joseph Onorati. He strikes me as more of a sprinter. I don’t know if you’ve seen his legs.

Joseph Onorati, CEO, DeFi Development Corp: Yeah.

Dan Kang, CSO and Head of Investor Relations, DeFi Development Corp: He doesn’t skip leg day.

Joseph Onorati, CEO, DeFi Development Corp: Yeah, we got to make that meme, that dude running up the mountain, that’s CHAD.

Pete Humiston, CMO, DeFi Development Corp: Well, I just want to also point out, from my vantage point personally, it’s really cool to see CHAD not just get tokenized, but us start to see some of the use cases of bringing instruments like this on-chain and what it unlocks. For not just us, but also for market participants alike. Super excited to see how the DeFi innovation around CHAD expands and grows. All right, fellows, last one here, and I’ll throw this one at Jon. This is in regards to the CHAD ATM. Has DFDV begun issuing CHAD through the ATM, or is ATM activity still limited to common stock? Are you waiting for CHAD to reach 10 before issuing?

John Han, CFO and COO, DeFi Development Corp: Yeah, great question. We’ve told the street and in our PR, and I think also in the prospectus, that we would only issue CHAD at $10, which is true. That said, we have begun issuing CHAD into the market, and please note, it is non-dilutive to DFDV shareholders, to common shareholders, which is fantastic. So yeah, we have begun issuing, and some of those dollars are definitely flowing to buy additional Solana, which is fantastic, and then that loops around to earn additional yield, which grows revenue and Solana per share and all that great stuff, and it’s a fantastic cycle. That said, we are currently not in a place where we will be disclosing exactly how much ATM we’re raising on CHAD. But that said, yeah, we’re very excited.

I think Joseph, DK, and Pete already mentioned, we’re very excited looking at the volume both in traditional markets and DeFi markets. What’s also very exciting about the DeFi markets is, this has been online for just a few days, and you’re already seeing DeFi markets, the volume just being absolutely incredible. So the speed of innovation in DeFi is frankly unparalleled, right? Many of these We’re still waiting for options, right, on CHAD in TradFi markets. But the new types of financial innovations that exist on DeFi for CHAD is very interesting. All to say that huge volume, we are ATMing, but we’re currently not planning to disclose on a very short-term basis how much of CHAD we are ATMing. Thank you.

Pete Humiston, CMO, DeFi Development Corp: All right, guys. Well, that was the last one. Any parting words before we close out here?

Joseph Onorati, CEO, DeFi Development Corp: Thank you again. Yeah, we appreciate everybody coming out to listen. I see a lot of you guys on Twitter and elsewhere. Appreciate it. Thanks for all the support. Talk to you all next time.

John Han, CFO and COO, DeFi Development Corp: Thank you.

Pete Humiston, CMO, DeFi Development Corp: Great. Thanks for that, guys. All right. Well, great place to wrap. Thanks, everyone, again for coming through and those who asked questions and continuing to follow along with what we’re building here. With that said, we can close out in service of SOL per share growth. This is Pete and the DFDV team signing out. See you, everyone.

John Han, CFO and COO, DeFi Development Corp: Thank you.