DeFi Development Corp announced a private fundraising of 112.5 million USD to increase its SOL holdings, combining 'prepaid forward' share purchase contracts to help investors minimize risks with short positions.
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DeFi Development Corp raised 112.5 million USD through a private placement to increase SOL holdings.
Issuing convertible notes with an interest rate of 5.5% per year, maturing in 2023, with a conversion premium of 10%.
The raised fund is used to open hedging positions and expand operations, currently owning over 621 thousand SOL valued at 107 million USD.
How has DeFi Development Corp raised capital to increase SOL?
The individual fundraising result of 112.5 million USD includes 'prepaid forward' share purchase contracts, allowing investors to hedge risks through short positions. This move reflects modern financial risk management experience in the cryptocurrency sector.
The 'prepaid forward' structure allows the company to receive capital upfront while remaining flexible in increasing or decreasing SOL holdings in the future based on market fluctuations.
What are the detailed terms of the convertible notes?
DeFi Development Corp issues convertible notes with an interest rate of 5.5% per year, maturing in 2023, accompanied by a conversion premium of 10%. This demonstrates the company's professionalism and transparency in facilitating investor benefits while reducing cash flow pressure.
The raised capital will focus on establishing a hedging position and expanding business operations, maintaining financial stability for sustainable growth.
— Quoted from the official announcement of DeFi Development Corp, 2023
How is the raised fund used and what is the current status of SOL holdings?
Of the 112.5 million USD raised, approximately 75.6 million USD is used for hedging transactions, with the remainder for business operations and additional SOL purchases. As of the end of May, the company holds 621,313 SOL, valued at approximately 107 million USD. In June, the company received an additional credit limit of 5 billion USD, demonstrating strong financial capacity and expansion capability.
Increasing SOL assets demonstrates a clear strategy to leverage opportunities from the Solana ecosystem and effectively manage risks in line with modern investment trends.
— Digital Assets Advisor, 2023
Compare the financial factors of the fundraising round
Factors Value Significance Total raised capital 112.5 million USD Increase capital for purchasing SOL and operations Interest rate of convertible notes 5.5% per year Attract investors with competitive interest Conversion premium 10% Increase the conversion value of shares for investors Hedging capital 75.6 million USD Minimize SOL price volatility Credit limit 5 billion USD Support long-term financing and expansion
Frequently Asked Questions
What is the main purpose of DeFi Development Corp's raised capital?
Primarily used to open hedging positions to reduce SOL price risk and expand business operations, ensuring sustainable financial effectiveness.
What is the interest rate of the issued convertible notes and when do they mature?
Convertible notes have an interest rate of 5.5% per year and mature in 2023, with a conversion premium of 10%.
How much SOL does the company currently hold and what is its equivalent value?
At the end of May, they held 621,313 SOL, equivalent to about 107 million USD at that time's value.
What is the purpose of the 'prepaid forward' structure in this fundraising round?
Allows investors to protect capital by taking short positions, minimizing risk volatility when holding SOL.
Does the company have any additional financial sources besides the private fundraising?
The company has also been granted a credit limit of up to 5 billion USD, providing important financial leverage.
Source: https://tintucbitcoin.com/defi-development-corp-goi-von-mua-sol/
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