DeFi Development Corp., a publicly listed company specializing in Solana treasury holdings, has established a large equity line of credit aimed at acquiring a significant amount of SOL tokens.
On Thursday, #DeFiDevelopmentCorp . announced the signing of a $5 billion equity line of credit agreement with RK Capital. Under this agreement, this AI application real estate platform (now successfully pivoted to a Solana treasury holding company) will have the option – but not the obligation – to issue and sell common stock worth up to $5 billion to RK Capital, a partner and PIPE investor of DFDV.
Mr. Joseph Onorati, CEO of DeFi Development Corp., shared with Decrypt: "The equity line of credit (ELOC) gives us flexibility. Instead of locking in a price once in a volatile market, we can raise funds gradually and only when it aligns with our goal: increasing the number of $SOL per share." He added: "We have intentionally avoided high-leverage debt or short-term debt to protect long-term shareholders from forced sell-offs or liquidity crises."
The company will use all proceeds from the issuance and sale of stock to purchase Solana. When asked when this might happen, Onorati stated that the company does not provide specific guidance. "What we can say is that our goal is not to raise capital for its own sake – but to only raise it when it strengthens SOL per share in the long run," he said, adding that the company will only raise funds when it is in their best interest.
"We will only raise funds when it is clearly beneficial for SOL per share. That usually means when we are trading significantly above net asset value (mNAV) and there is a clear, enhanced opportunity to capture that spread," Onorati added. "Our guiding principle is SOL/share growth – if the fundraising does not support that, we will not do it."
Since establishing the treasury strategy #solana in early April, the company has accumulated nearly $100 million in SOL, now holding over 620,000 tokens.
In addition to accumulating this sixth-largest cryptocurrency asset, DFDV is also delving deeper into the Solana ecosystem. Starting with rebranding from Janover to DeFi Development Corp., a signal of their commitment to cryptocurrency efforts, the company also acquired a Solana validator business for $3.5 million to help boost its SOL staking efficiency. Additionally, they partnered with the leading Solana meme coin community BONK and have created their own liquid staking token since then, allowing stakers with their validator set to maintain liquidity while still earning yields.
DFDV shares have risen 21% today and 115% for the week. Meanwhile, Solana has dropped 3.4% in the past 24 hours but has increased about 5% for the week, reaching $157.66.
On Wednesday, the company withdrew a registration statement on Form S-3 with the SEC, retracting a filing related to its plan to raise $1 billion to buy SOL. Decrypt asked how this move would affect the company's plan to purchase Solana but has not received an immediate response.
