DeFi Development Corp launches CHAD as first SOL-backed Digital Credit instrument

DeFi Development Corp. (DFDV) has launched CHAD, a variable-rate perpetual preferred stock backed by the company’s Solana (SOL) treasury strategy.

DFDV launches CHAD, raises $11 million from initial offering

DFDV stated that it closed an underwritten public offering of its Variable Rate Series C Perpetual Preferred Stock, generating approximately $11 million in gross proceeds. The company expects to use all of the net proceeds substantially to acquire additional SOL.

CHAD was issued at $8 per share, compared with a stated amount of $10 per share. The preferred stock carries an initial annual dividend rate of 13%, representing an effective yield of approximately 16.25% based on the offering price.

The offering included participation from Thomas Lee, co-founder and head of research at Fundstrat Global Advisors and chairman of the board of BitMine. R.F. Lafferty & Co. served as the sole book-running manager.

“For the first time, investors can access Digital Credit backed by Solana, while DFDV gains a new source of permanent capital that can be deployed directly into additional productive SOL,” said DFDV CEO and Chairman Joseph Onorati in a Tuesday statement.

Onorati said the company expects the transaction to increase SPS without increasing its common share count.

Dan Kang, DFDV’s chief strategy officer and head of investor relations, said establishing CHAD near its stated $10 amount is a priority. He added that the variable-rate structure gives DFDV flexibility to manage the instrument toward that level.

The structure draws comparisons with Strategy’s (MSTR) preferred-stock model. The company has used preferred securities, including its Variable Rate Series A Perpetual Stretch Preferred Stock (STRC), as a source of capital for its Bitcoin treasury model without issuing additional common shares.

In a Form 8-K filed with the Securities and Exchange Commission (SEC) on Tuesday, Strategy stated that it did not sell shares through its at-the-market (ATM) offering program last week. The company added that it neither sold nor bought any additional Bitcoin over the same period.

Strategy also said it repurchased 1.8 million STRC shares for about $176 million. The company reported $5.10 billion in its USD Reserve and $1.44 billion in USD Cash.

CHAD gives DFDV a preferred-equity funding structure similar to Strategy’s approach, but applies it to a Solana-focused treasury.

DFDV traded at $5.99, up 2% at the close of the market, with a 0.17% gain in after-hours trading.