SRM Entertainment (SRM), a famous toy manufacturer, has quickly become the financial arm of Justin Sun, the founder of the TRON ecosystem (TRX). The company recently successfully raised 210 million USD to establish a reserve fund and stake TRX, following a similar model to MicroStrategy with Bitcoin.
Fundraising, staking, and crypto dividend plans
On June 16, announced plans for an IPO in the US through a reverse merger with SRM, the new company will be named Tron Inc, focusing on purchasing and holding TRX. Dominari Securities, an investment bank close to the Trump family, is the advisor. Justin Sun has joined SRM as an advisor, and his father, Mr. Weike Sun, holds the position of Chairman of the Board of SRM after the merger.
Shortly after, SRM completed a funding round of 100 million USD (potentially up to 210 million USD) to establish a reserve fund. This capital will help SRM expand its TRX holdings, enhance staking, and implement financial strategies around TRON.
On June 30, SRM staked a total of 365,096,845 TRX through JustLend, the largest lending protocol on the TRON network. The goal is to achieve an interest rate of up to 10% per year, thanks to the combination of staking rewards and energy leasing. CEO Rich Miller expects this strategy to unlock new value for shareholders, benefiting from the increasing widespread application of TRON in cross-border payments using stablecoin USD.
Notably, SRM plans to implement dividends for shareholders from the profits of staking TRX, marking the first time a listed company in the US pays indirect dividends using crypto yield. Immediately after the announcements, the stock has risen over 13.5% in trading on Monday, currently trading around 7.75 USD per share with a market capitalization of nearly 150 million USD.
Potential risks and vision
Although SRM's move has created a significant buzz, analysts still warn of many risks: a drop in TRX price could affect SRM's asset value; the fundraising model, staking for yield, and then paying dividends could easily collapse if TRX prices plummet; legal risks with TRON and SRM in the US market still exist; SRM's rapidly rising stock could lead to sharp corrections; and SRM is moving away from traditional business without a clear long-term revenue model from Tron Treasury.
Some experts liken SRM to 'MicroStrategy version TRON'. Others believe that with the cross-border stablecoin payment system that TRON is building, this move could be a 'Visa Moment' for stablecoins on the TRON blockchain, paving the way for emerging markets to use USDT/USDC stablecoins as official means of payment.