Gate Research Institute: Capitalized Crypto Belief, Discussion on the Sustainability of the Crypto Treasury Model

Author: Gate Research Institute

Abstract

• Strategy pioneered the concept of digital asset treasury (DAT), prompting more publicly listed companies to follow suit and embark on a new chapter of DAT. By 2025, the scale of DAT experienced explosive growth, with Ethereum DAT igniting a new wave of staking.

• The core logic of the DAT model is a capital cycle of "financing - buying coins - refinancing," which binds traditional capital market financing methods to the price appreciation of digital assets, forming a self-reinforcing flywheel. The market value changes of DAT are primarily determined by the growth in the number of tokens per share, the price of underlying assets, and mNAV, which together define its attractiveness and risk level in the capital market.

• As institutional funds continue to flow into the Ethereum ecosystem, DAT companies have evolved from mere token holders to network participants and revenue creators. Their main entry paths include staking, DeFi, and on-chain operations. Solana DAT may become one of the fastest-growing and most dynamic tracks within the DAT model.

• By constructing a five-force model for DAT sustainability, we believe that Bitcoin DAT is evolving towards long-term value storage, emphasizing anti-inflation narratives and institutional allocation. Ethereum and Solana DAT are developing into revenue-generating treasuries, creating cash flow through on-chain operations. DATs that can truly weather cycles must possess a robust capital structure, transparent financial disclosures, and clear strategic positioning. The future winners will not be numerous "shell companies" lacking core business, but rather a few leading firms that can simultaneously create a flywheel effect at both the capital market financing end and the on-chain ecosystem participation end.

I. Introduction

As global attention on digital assets continues to rise, regulatory policies in various countries become clearer, and the underlying technology and ecosystem of blockchain mature, digital asset treasury (DAT) is becoming a new capital narrative in the traditional financial sector.

DAT companies refer to publicly listed enterprises that treat cryptocurrencies as core reserve assets on their balance sheets. Unlike "crypto-native companies," the primary valuation drivers for these companies are not their main business revenues, but rather the value fluctuations of their held digital assets. These companies raise funds from shareholders through equity financing, convertible bonds, and other means, and then invest the proceeds into digital assets, boosting investor confidence while driving their stock prices higher, thus creating a cycle of "financing - holding coins - valuation increase" in the capital market.

On the surface, the DAT model may seem like "public companies buying coins," but in reality, it has evolved into various segmented forms: from the single-asset passive holding model represented by Strategy to the multi-asset portfolio model that achieves active management through staking, liquidity mining, and DeFi yields. The emergence of DAT companies has transformed the risk exposure of digital assets, which was previously limited to on-chain investors, into tradable investment targets in the traditional stock market, thus providing a bridge for a broader range of investors to enter the crypto market. In this process, DAT is no longer just a price follower in the Beta market, but may become a source of Alpha driving the continuous growth of the on-chain ecosystem.

However, DAT is not without risks as a "financial innovation model." Its sustainability largely depends on the market cycle of the underlying assets. When digital asset prices plummet and liquidity tightens, DAT shell companies, which lack core business and cash flow, often bear the brunt, struggling to withstand the dual blows of asset depreciation and financing interruption, and may even face liquidation risks. In other words, DAT acts as an amplifier in bull markets and a magnifying glass in bear markets.

This report will assess the long-term sustainability of the DAT model from five dimensions, exploring the stability of token prices and treasury scales for DAT development.

II. The Origin and Evolution of DAT

When discussing the origin of DAT, one cannot overlook a legendary company—Strategy, which is both a veteran in business intelligence software services and a pioneer in the Bitcoin wave. From its lows to peaks, Strategy's journey has not only aligned with the trends of the times but also pioneered the concept of digital asset treasury. Now, it stands as a classic case in business history, adding more dimensions to discussions in the cryptocurrency industry.

1. Where the DAT Model Began

1.1 Strategy's Bitcoin Strategy

Strategy Inc. (NASDAQ: MSTR) was the first to propose the DAT company strategy, positioning Bitcoin as its corporate reserve asset.

Founded in 1989 and headquartered in North America, this software company initially focused on developing and selling enterprise business intelligence (BI) software. It experienced rapid growth during the internet bubble of the 1990s and went public in 1998. However, in 2000, the company was investigated by the SEC due to a financial fraud scandal involving "premature revenue recognition," causing its stock price to plummet by over 90%, becoming a typical case of the bubble's collapse. Over the next twenty years, Strategy struggled to make significant progress in competition with much larger software giants like Microsoft, with its market value fluctuating mostly between $1 billion and $2 billion.

The turning point came in 2020 when the company's founder, Michael Saylor, reassessed Bitcoin's value during the COVID-19 pandemic. Prior to this, Michael Saylor was a staunch opponent of cryptocurrencies, believing Bitcoin was worthless and that investing in it was a foolish idea. However, during the pandemic, countries adopted loose monetary policies to stimulate the economy, leading to currency depreciation and heightened inflation risks. Michael Saylor believed that as the money supply grew at an annual rate of 15%, people needed a hedge asset not tied to fiat cash flows. After thoroughly researching the underlying logic of blockchain, he discovered that Bitcoin, which naturally undergoes halving every four years, not only resists inflation but also, due to various restrictions in the cryptocurrency market, some individual investors and institutions cannot directly invest or leverage Bitcoin. Holding it indirectly through stocks would open up new markets. Thus, Michael Saylor decisively chose to challenge traditional investment concepts, abandoning traditional quality assets, and while many companies only bought bonds and gave up around 7% of shareholder equity, he made the groundbreaking choice of "digital gold" Bitcoin [1].

1.2 From "Corporate Reserve Assets" to "BTC per Share" Logic

From Strategy's 2020 financial report, the main business revenue from software was only tens of millions of dollars, but considering the operational accumulation over twenty years, the total cash reserves were about $500 million. The initial Bitcoin investment was made by Strategy using its idle funds: in August 2020, it spent $250 million to purchase 21,454 Bitcoins [2], marking Strategy's transformation from a traditional software company to a Bitcoin-holding DAT company.

If Strategy relied solely on operational cash flow, it could not quickly expand its Bitcoin position, especially since the market was in a zero-interest-rate environment, and investors were intensely pursuing high-growth assets. Therefore, Michael Saylor thought of utilizing the capital market for low-cost financing. Subsequently, Strategy implemented a Bitcoin flywheel centered on its own funds and debt financing (including convertible bonds, preferred secured bonds, and stock issuance). In December 2020, Strategy issued $400 million in convertible bonds (0.75% interest, maturing in 2025) [3], using all the funds to buy Bitcoin. The advantage of issuing convertible bonds is that, as they are initially debt, they do not dilute equity, thus protecting shareholder rights. The initial few issuances had interest rates mostly between 0% and 0.875%, with typical exercise premiums of 40-50%, indicating that investors recognized Strategy's long-term growth and wanted to become its shareholders. By early 2021, Bitcoin's price soared to $60,000, and the book value of this portion of Bitcoin was approximately five times the initial investment, significantly changing the market's pricing of Strategy. As the Bitcoin strategy began to show results, the stock price continued to rise, and Strategy also adopted market price stock issuance for financing. To greatly reduce the likelihood of shareholder concerns about stock dilution, Strategy innovatively created a metric called "BTC Yield," which indicates the ratio change between the company's Bitcoin holdings over a certain period and the assumed diluted shares outstanding, helping assess whether the company has truly converted the financing money into more Bitcoin without severely diluting existing shareholders.

BTC Yield = Total BTC Holdings / Diluted Shares Outstanding

From then on, Strategy became the largest institutional holder of cryptocurrencies, with its stock price highly correlated with Bitcoin, reaching an all-time high of $473.83 in November 2024, an increase of 3,734% from when it first started buying Bitcoin. Strategy's success also reshaped the narrative in the capital markets, prompting more publicly listed companies to follow in Strategy's footsteps and embark on a new chapter of DAT.

2. Spread and Wave of the DAT Model

2.1 Explosive Growth of DAT Scale by 2025

Taking Bitcoin, the most sought-after asset by capital, as an example, in 2020, publicly listed companies globally held a total of 4,109 Bitcoins, accounting for only 1.49% of all institutional holders (including governments, ETFs, private foundations, etc.), having an extremely limited impact on the overall market. However, as the cryptocurrency ecosystem gradually matured and Bitcoin prices continued to rise, coupled with the rise of the DAT model, publicly listed companies began to enter the Bitcoin market on a large scale. In 2021, the holdings of publicly listed companies surged to 155,196 Bitcoins, more than tripling from 2020, marking the initial formation of the DAT crypto asset trend. With the continued influx of institutional funds, the holdings of publicly listed companies further expanded to 306,765 Bitcoins in 2022. Although market fluctuations in 2023 led some companies to reduce their holdings, bringing the total back to 293,042 Bitcoins, by 2024, it climbed back up to 361,144 Bitcoins, indicating a more robust overall strategy among publicly listed companies. By 2025, this trend experienced explosive growth, with holdings surpassing one million Bitcoins in July, reaching 1,130,679 Bitcoins by October 2, accounting for 5.38% of the total circulating Bitcoin supply [4]. This indicates that publicly listed companies have shifted from cautious initial trials to strategic, long-term Bitcoin treasury layouts, reflecting not only the capital market's recognition of Bitcoin as "digital gold" but also signaling that the DAT model is accelerating its spread, becoming a new narrative for corporate value management and capital operations.

2.2 Dominance Still in North America, Asian Markets Accelerating Catch-Up

Currently, Bitcoin DAT companies are distributed across 199 countries and regions globally, but the dominant forces remain concentrated in the North American market—holding a core position in terms of the number of companies, financing channels, and capital market discourse. The United States has 71 DAT companies, leveraging the mature disclosure mechanisms of Nasdaq and the stock market, allowing these enterprises to smoothly incorporate digital asset allocations into their treasury strategies through equity, convertible bonds, and other tools. Canada follows closely with 33 DAT companies, benefiting from its lenient regulatory environment and inclusiveness towards crypto funds, making it the second-largest DAT hub.

In the past year, the Asian DAT market has accelerated its catch-up, particularly with localized explorations in Hong Kong and Japan gradually taking shape. Japan has 12 DAT companies, Hong Kong has 10, and mainland China has 9, showing a gradually decentralized pattern. The Japanese market has seen some targets related to listed companies or financial funds on the Tokyo Stock Exchange begin to allocate digital assets, with the most representative being the Bitcoin tracker Metaplanet Inc., which started publicly disclosing its Bitcoin holdings in 2024 and is regarded as "Japan's MicroStrategy," rapidly becoming a benchmark case driving the spread of the DAT model in Japan. Meanwhile, Hong Kong has seen DAT pilots represented by crypto exchanges and fund companies, driven by the Hong Kong Stock Exchange and crypto trading platforms, reflecting mutual promotion from both policy and market sides. Notably, DAT companies are no longer limited to technology or financial backgrounds; their main business covers a wide range, from biotechnology and e-commerce to services and even nail salons, showing the universality of this trend.

2.3 Ethereum DAT Igniting a New Wave of Staking

At the same time, the asset categories of the DAT model are also expanding. Initially, almost all focus was on Bitcoin, but the capital market has never ceased seeking the next "Bitcoin-like" asset or even one that surpasses Bitcoin—an asset that possesses both store of value attributes and the potential to generate additional income. Ethereum and Solana are representatives of this trend: they not only have active smart contract ecosystems and DeFi application scenarios but also provide staking rewards for holders under the PoS consensus mechanism, thus being seen as the next stop for the DAT track.

The narrative of Bitcoin reserves began to shift towards Ethereum in mid-2025, with actions including ecosystem participation and staking, among which BitMine Immersion Technologies and SharpLink Gaming are two key drivers.

BitMine (NYSE: BMNR) initially focused on Bitcoin mining and infrastructure, also offering crypto mining hosting and operations. In July, it transformed into an Ethereum reserve entity through a $250 million private financing (PIPE) [5]. BitMine stated that Ethereum's smart contract capabilities, stablecoin payments, and tokenized assets were key reasons for its ETH reserves. Following the announcement of its Ethereum reserve, BitMine's stock surged significantly in the short term, reflecting market enthusiasm and confidence in this model. As of October 3, 2025, its Ethereum reserves rapidly reached 2,650,900 ETH, accounting for 2.2% of the total Ethereum supply, making it the largest Ethereum reserve company.

On the other hand, SharpLink Gaming (NASDAQ: SBET), the second-largest participant in Ethereum treasury, primarily operated in online gaming, esports, gambling, and sports entertainment. Although not a crypto-native company, it operated flexibly in the capital markets. SharpLink Gaming launched its Ethereum treasury strategy in June, acquiring Ethereum outside of Bitcoin through ATM equity financing and allocating over 95% of its Ethereum reserves for staking to generate passive income. SharpLink maintains high-frequency disclosures, providing transparency and traceability to the market. As of October 3, 2025, SharpLink's Ethereum reserves reached 838,728 ETH, accounting for 0.7% of the total Ethereum supply. These two companies represent the leap of the Ethereum DAT model from concept to large-scale capital market practice.

Now, more companies are incorporating Ethereum, Solana, Dogecoin, and Sui, among other public chain tokens, into their reserve assets to increase portfolio diversity and potential returns. As of October 2025, 13 companies have disclosed holdings of Ethereum, totaling 4,029,665 ETH, equivalent to 3.33% of the total ETH supply. For Solana, 9 companies have publicly disclosed holdings, totaling 13,441,405 SOL, approximately 2.47% of the total SOL supply. For Dogecoin, 2 companies have publicly disclosed holdings, totaling 780,543,745 DOGE, about 0.52% of the total DOGE supply. For Sui, 2 companies have publicly disclosed holdings, totaling 102,811,336 SUI, around 2.84% of the total SUI supply [6]. This multi-chain expansion signifies that DAT is no longer a "single asset Bitcoin" story but has evolved into a cross-chain, multi-asset corporate capital strategy, laying the foundation for the future position of digital assets in the global capital market.

III. The Operational Logic of DAT

Some crypto companies have gone public through shell resources in the capital market, opening up public market financing channels, and then completing the capital cycle through the core logic of the DAT model of "financing - buying coins - refinancing." DAT companies bind traditional capital market financing methods to the price appreciation of digital assets, forming a self-reinforcing flywheel.

1. Operational Methods

1.1 Acquiring Listings Through Shell Companies

Some enterprises do not start from scratch but quickly gain entry into the capital market through special purpose acquisition companies (SPACs), business mergers, or reverse takeovers (RTOs). For cryptocurrency companies, going public through a shell is an attractive alternative to cope with regulatory barriers and the lengthy IPO process. Once the acquisition is completed, these companies gain access to public market financing channels, allowing them to conduct equity financing as "compliant listed companies" and use the raised funds to directly purchase Bitcoin, Ethereum, and other digital assets.

Representatives of such operations are primarily concentrated in emerging North American DAT companies. For example, on July 8, 2025, the newly established crypto asset management company Reserve One announced it would go public through a SPAC merger with M3-Brigade Acquisition V Corp. (NASDAQ: MBAV). This deal is valued at $1 billion, including $298 million in trust capital, while also attracting strategic investors like Galaxy Digital, Pantera Capital, and Kraken, who committed to investing $750 million. Reserve One aims to accumulate a reserve of digital assets covering Bitcoin, Ethereum, and Solana, planning to use these assets for staking and lending [7].

This shell company acquisition logic resembles a combination of "capital shell + digital assets": while reducing entry barriers through shell resources in the capital market, this method of rapidly expanding the asset side by bypassing traditional entrepreneurial cycles often comes with higher risks, as it lacks fundamental support. Shareholders may not only face dilution but also amplify the company's dependence on the price volatility of digital assets.

1.2 Financing Cycles Through Issuance, Bonds, and Convertible Bonds

Strategy pioneered the "financing - buying tokens - valuation increase - refinancing" flywheel, and this model has since been emulated by traditional listed companies and public chains that have gone public through shell companies, forming the operational model of most DAT companies today. Specifically, DAT enterprises first utilize capital market financing, whether through stock issuance (ATM/PIPE) or issuing convertible bonds and corporate bonds, to obtain new cash inflows; subsequently, these funds are directly used to purchase Bitcoin, Ethereum, and other digital assets, thereby expanding the treasury scale. This cycle accelerates the binding of capital and digital assets. Strategy's successful case demonstrates the amplifying effect of this model in bull markets and provides a template for subsequent DAT companies (such as BMNR, BitMine, SharpLink, etc.).

This model is particularly prominent among Ethereum-related DAT companies in 2025. BitMine's model is similar to Strategy's: it continually expands its balance sheet through convertible bonds and PIPE financing, becoming a milestone in institutionalizing Ethereum. SharpLink adopted a more aggressive and frequent financing strategy. Since announcing its intention to include Ethereum in its treasury in June 2025, SharpLink quickly raised funds through ATM equity financing and public stock issuance, allocating its Ethereum reserves for staking or liquid staking, transforming Ethereum's "productive" characteristics into sustainable cash flow. Although critics argue that "full staking" increases exposure to on-chain protocol risks, supporters emphasize that this sets a new paradigm for DAT companies exploring Ethereum as a productive asset.

2. Classification of DAT Strategy Operating Models

DAT is not merely about "holding coins." Different models correspond to varying management costs and requirements. Currently, DAT companies mainly have the following operational models:

1. Passive single-asset holding model: Focused on a single digital asset (usually Bitcoin or Ethereum), held long-term without selling. This model is relatively simple, with low management and decision-making costs, allowing for adherence to a set strategy regardless of asset price fluctuations, with returns primarily derived from capital gains from the appreciation of the digital asset. Strategy is the most typical passive Bitcoin DAT, publicly committing to "buy and not sell," viewing Bitcoin as the company's main asset and strategic core.

2. Active single-asset trading model: Although still holding a single digital asset, the management strategy involves active trading or dynamic allocation, such as timing trades, hedging strategies, and options strategies. This requires assessing the trading capabilities of the managers. Some Ethereum reserve companies may actively adjust their positions, reduce holdings, or switch assets during market fluctuations.

3. Multi-asset portfolio management model: Companies do not limit themselves to a single digital asset but hold multiple coins (such as BTC + ETH + SOL + BNB, etc.), requiring managers to dynamically adjust the proportion of each asset in response to market changes, thus incurring higher management costs and demanding asset allocation and risk control capabilities. For example, Mega Matrix Inc. (NYSE: MPU) announced in 2025 that it would expand its DAT strategy from a single asset (such as ENA tokens or ETH) to a multi-asset portfolio, including several leading stablecoins and their governance tokens, attempting to allocate risks and returns across multiple chains or protocols [8].

4. Ecosystem investment construction model: This is the most complex model. In addition to holding coins, companies also invest a portion of funds to support ecosystem construction, such as on-chain infrastructure, DeFi project investments, node/validator operations, protocol governance, ecosystem subsidies, and fund investments. This model positions the company as both an asset holder and an ecosystem participant, potentially influencing the development direction of the ecosystem it holds. In the Ethereum direction, some DAT companies may allocate part of their Ethereum for staking, validator operations, governance voting, or supporting DeFi application development, which itself is an ecosystem investment behavior, such as the previously mentioned SharpLink. In this model, DAT companies often also receive additional income from staking, investment incubation, transaction fees, etc., beyond the appreciation of digital assets.

3. Market Pricing Logic of DAT Companies

The valuation fluctuations of DAT companies, unlike traditional enterprises that rely on revenue and profit, depend more on the market performance of their held digital assets and their financial leverage strategies. From an investment perspective, the market value changes of DAT are primarily driven by three core variables: the growth in the number of tokens per share, the price of underlying assets, and the mNAV (Market Value to Net Asset Value) premium/discount. Together, these three form the "valuation triangle" of DAT, determining its attractiveness and risk level in the capital market.

Price increase ≈ Token quantity growth rate × Coin price growth rate × Market premium factor

The market premium factor refers to market sentiment and valuation premium relative to NAV, which can typically be quantified directly using mNAV, i.e., "market premium factor = mNAV - 1."

3.1 Growth of "BTC per Share"

Previously, we mentioned how Strategy created the "BTC per share" metric to help assess whether the company has truly converted the financing money into more Bitcoin without severely diluting existing shareholders. Following Strategy's success, many DAT companies have emulated this, with BitMine being a classic example—BitMine also continuously purchases Ethereum through financing and reinvestment, thereby increasing the number of tokens represented by each share.

When "BTC per share" rises, it indicates an increase in net asset value (NAV) per share. Theoretically, if the market is efficient, the stock price of DAT companies should rise in sync with NAV. Based on this, if the prices of underlying assets like Bitcoin are also rising, the market typically assigns higher valuation multiples to DAT, which can lead to a "coin price × token quantity × market premium" triple leverage effect, resulting in price increases far exceeding the coin price itself.

3.2 Price Push of Underlying Assets

The most direct driver of DAT company valuations comes from the price fluctuations of underlying assets. When the prices of core tokens like BTC and ETH rise, the company's book asset scale expands, and the market naturally assigns a higher valuation premium; conversely, a price drop directly erodes book value.

However, compared to traditional "asset-driven enterprises," DAT companies often amplify this price sensitivity. On the one hand, most DAT institutions do not set up hedging mechanisms, and their asset exposure is almost in sync with market prices; on the other hand, leveraging through financing and convertible bonds amplifies their coin positions, causing stock prices to become highly elastic to the prices of underlying assets. Therefore, the prices of underlying assets not only affect book value but can also create positive feedback through the "refinancing expectations - reserve expansion - valuation increase" chain reaction.

3.3 mNAV Flywheel Mechanism

mNAV is the core valuation metric under the DAT model, calculated as follows:

mNAV = P Market Cap / NAV Digital Asset Value

Where P represents the company's market capitalization, NAV represents the net asset value of the company's held digital assets valued at market prices, and mNAV refers to the market net asset value ratio.

When the stock price P exceeds the net asset value per share NAV, i.e., mNAV > 1, it indicates that the market assigns a valuation premium to the company beyond its held coin value, reflecting investors' recognition of the DAT company's management capabilities, refinancing potential, or strategic value of digital assets. The company can continue to raise funds, and each issuance will push up the per-share holdings and book value, further reinforcing market confidence in the company's narrative, driving the stock price higher. Thus, a closed-loop positive feedback flywheel begins to turn.

However, mNAV is a double-edged sword; a premium can represent high market trust but may also be a bubble created by capital speculation. Once confidence collapses and mNAV significantly converges or falls below 1, the flywheel can shift from positive to negative cycles, with the market switching from "logic of book value enhancement" to "logic of net asset dilution," forming a negative feedback loop of "valuation decline - financing constraints - reserve shrinkage - further market cap decline." If this coincides with a drop in the prices of cryptocurrencies themselves, it undoubtedly exacerbates the negative flywheel, causing a double whammy of market cap and confidence loss. Theoretically, when mNAV < 1, a more reasonable choice for the company is to sell holdings to repurchase shares to restore balance.

Taking Strategy as an example, during the Bitcoin bull market, MSTR's market cap once reached over twice its book BTC holdings, i.e., mNAV ≈ 2.0. This represented that investors were not only buying "Bitcoin reserves" but also paying a premium for the company's future financing capabilities and capital efficiency. However, during the bear market phase, its mNAV once fell below 1, but the company chose not to sell Bitcoin for repurchase, instead opting for debt restructuring to retain all its Bitcoin.

In summary, the financing of DAT companies is built on the mNAV premium flywheel. The mNAV premium is not only a barometer of market enthusiasm for DAT but also constitutes an important reference for investors to judge buying and selling timing. However, when mNAV remains in a discount state for an extended period, the space for issuance will be blocked, and the business of small-cap shell companies that are already stagnating or on the verge of delisting will be completely overturned, causing the established flywheel effect to collapse instantly.

IV. The Shift of DAT from "Holding" to "Staking"

In contrast to the passive holding strategy of Bitcoin DAT, Ethereum DAT, which utilizes staking and DeFi infrastructure, may ultimately direct some funds onto the chain. This allows DAT companies to not only complete the capital cycle flywheel but also earn additional interest through on-chain staking, enabling the productive use of held assets.

1. Ethereum Creating Revenue-Generating DAT Models

As a blockchain operating system capable of running various DApps, Ethereum's three-layer architecture provides multi-level revenue and risk management space for the DAT model. DAT companies primarily participate at the L1 and DeFi layers (L2 is more active for crypto-native institutions and DAOs): putting their reserved Ethereum on-chain to create "on-chain interest-type revenue," transforming coin holdings into productive assets.

1.1 Ethereum Staking: From Static Holding to Interest-Type Revenue

As institutional funds continue to flow into the Ethereum ecosystem, DAT companies have evolved from mere token holders to network participants and revenue creators. Staking is the primary pathway for DAT companies to enter the Ethereum ecosystem, currently mainly through two methods of participation:

1. Running validator nodes themselves: Companies lock their held Ethereum in validator nodes, providing consensus security and transaction verification services for the network. Through the staking reward mechanism, they can earn annualized block reward income of about 2.5-3.0%, but this method has high operational complexity, low liquidity, and risks of node penalties.

2. Utilizing liquid staking protocols: Companies can delegate their Ethereum to third parties for staking and receive tradable "receipt tokens," such as Lido's stETH. For example, BTCS earns income through Rocket Pool. Liquid staking solves the problem of traditional staked assets being locked up by issuing tradable tokens (representing staked ETH), allowing companies to earn staking income while maintaining asset liquidity, enabling DAT companies to generate revenue without sacrificing operational flexibility.

Assuming the company treasury currently holds about 1 million ETH, with 50% staked, based on a current nominal yield of about 3% and an Ethereum price of $4,000, it could generate about $60 million in staking income annually.

1.2 DeFi: Making Ethereum "Move"

Building on the staking of Ethereum, DAT companies can further participate in DeFi protocols, using Ethereum or staking receipts (like stETH) for DeFi lending or liquidity provision, achieving secondary utilization of funds. Common methods include:

1. Depositing stETH into DeFi lending protocols like Aave to earn interest;

2. Using stETH as collateral to borrow stablecoins for reinvestment;

3. Joining liquidity pools to earn additional transaction fees, etc.

This approach can increase yields from single staking of 3% to 5-10%, injecting institutional-level liquidity into the Ethereum ecosystem.

2. Solana's High Yields Provide New Options for DAT

In 2024, as Solana became the top-ranked ecosystem for new developers, the potential space for Solana DAT companies is also an overlooked new direction, with some institutions even believing it may surpass Ethereum to become the mainstream DAT model. The reasons can be summarized as follows:

1. Higher yields: Solana's staking yield is about 6-8%, generally higher than Ethereum's approximately 3%, making it more attractive to DAT companies seeking passive income or cash flow.

2. Growth of the ecosystem network and infrastructure support: Solana's network activity and developer growth rate have, at times, surpassed ETH. In the second quarter of 2025, the Solana network processed over 8.9 billion transactions, supporting nearly $3 billion in daily DEX trading volume, generating over $1.1 billion in network revenue, more than 2.5 times that of Ethereum [9]. Additionally, Solana's transaction throughput (TPS), low fees, and fast confirmations make it more appealing for DAT model companies seeking "quick on-chain + high-frequency interaction/low fees."

3. Rapidly rising market recognition: Cantor Fitzgerald has given "overweight" ratings to several Solana DAT companies, citing rapid developer growth and swift ecosystem expansion [10]. Multiple PIPE or private/strategic investments are unfolding around SOL DAT, for instance, in August 2025, Sharps, Pantera, and Galaxy planned to allocate $2.65 billion to Solana DAT [11].

Not only holding coins, Solana DAT companies are also participating in validator operations, infrastructure construction, or ecosystem subsidies in on-chain activities. For example, SOL Strategies (NASDAQ: STKE) has built its Solana treasury from scratch over the past year, increasing revenue sources through DAT combined with validator income and other infrastructure operations.

3. Comparative Advantages of Ethereum and Solana DAT

In the medium to long term, Solana DAT is expected to continue growing rapidly, potentially becoming one of the fastest-growing and most dynamic tracks within the DAT model. However, in terms of absolute scale and institutional maturity, Ethereum still holds a leading advantage, with Ethereum DAT's influence being more mature in terms of quantity, asset scale, and frequent participation in DeFi ecosystems and on-chain activities. If certain key factors continue to optimize, such as the stability of Solana's mainnet, infrastructure security, and clarity of the regulatory environment, Solana DAT may potentially become a parallel main direction alongside Ethereum, especially favored by DAT companies needing high speed and low gas fees.

V. Discussion on the Sustainability of the DAT Model

1. Evolution and Risks of DAT Growth Logic

In essence, the core of DAT has never been the profitability of the main business but rather the growth achieved through holding and operating digital assets, amplifying market value and assets in a cyclical manner. The growth logic of DAT can be summarized in three points: First, narrative-driven, DAT "securitizes" digital assets, allowing traditional capital to gain crypto Beta in the stock market, providing valuation premiums through indirect coin holdings. Second, asset appreciation, where the underlying coin price rises, drives balance sheet expansion, mNAV increases, ultimately triggering market revaluation. Finally, the financing flywheel, where high valuations support the company to issue more shares to buy coins, expanding holdings and boosting market confidence, further elevating valuations. Thus, in bull market phases, DAT rapidly accumulates attention and valuation premiums through "narrative + asset appreciation + financing flywheel," attracting more capital inflows.

However, entering 2025, the market began to reassess the sustainability of the DAT model. While the market has Strategy, which once leaped from a marginal software company to a top Nasdaq stock, since the stock price peak at the end of 2024, the myth of stock price created by Strategy seems no longer to be repeated. The market began to criticize the DAT strategy as merely a magnifying glass in bull markets, while in bear markets, "BTC per share" would become worthless. At the same time, Michael Saylor's faith in Bitcoin has also come under scrutiny—does refusing to liquidate to maintain BTC per share truly align with shareholder interests? Meanwhile, more and more companies have begun to replicate Strategy's model, quickly crowding the DAT track, diminishing the "market cap amplification effect" that originally relied on scarcity and narrative tension. In other words, when DAT is no longer scarce, the marginal effect of its "asset-driven + valuation premium" model is diminishing.

In this context, the rise of the Ethereum ecosystem has ushered in the second phase of the DAT model—active DAT participating in the on-chain economy. Unlike the passive holding of Bitcoin treasuries, Ethereum DAT can create compound returns through staking, DeFi protocols, and on-chain liquidity operations, forming a second growth curve of "asset monetization." However, this trend has also sparked new controversies: will the large-scale staking of institutional treasuries lead to a decline in overall staking returns and an increase in systemic risks? Is DAT's participation promoting ecosystem prosperity or accelerating bubble formation?

Based on this, the sustainability of the DAT model depends not only on the performance of a single asset but also on its interaction with the blockchain ecosystem, the company's operational quality, financing structure, and investor trust. Below, we will systematically analyze the challenges and evolutionary directions facing DAT from both "endogenous" and "exogenous" dimensions.

2. Five-Force Model for DAT Sustainability

The endogenous dimension refers to the company itself, specifically whether it possesses sufficient fundamentals and financial resilience to "weather" the price cycle fluctuations. The exogenous dimension pertains to the ecosystem and market, namely whether the participating crypto ecosystem and market environment can provide stable income sources and liquidity for treasury assets. Based on the previously mentioned market pricing logic of DAT regarding "BTC per share, underlying asset prices, and mNAV," combined with the new model of on-chain monetization, we have constructed a "five-force model for DAT sustainability," which will systematically evaluate the long-term viability of DAT from five dimensions: asset value, asset operation, company fundamentals, regulatory compliance, and investor liquidity.

2.1 Target Asset Value Force

As the foundation of the DAT model, the nature of the target asset determines its long-term value. Currently, there are three main types of DAT models in the market:

1. Bitcoin-type: Bitcoin, as the earliest and most widely accepted digital asset, holds the status of "digital gold," with its supply cap ensuring scarcity and anti-inflation logic. Additionally, the increasing holdings by global institutions and nation-states enhance its reserve attributes, allowing Bitcoin to serve as a value anchor during macroeconomic cycles. However, risks also exist; Bitcoin's limitation lies in its lack of yield, relying entirely on price appreciation for book value growth. Furthermore, in recent years, Bitcoin has begun to intertwine with political maneuvering, gradually evolving from a purely financial asset to a symbol of policy stance and ideology, with its price fluctuations increasingly influenced by election cycles, regulatory attitudes, and party policy expectations.

2. Ethereum-type: Compared to Bitcoin, Ethereum has a more complete economic internal circulation. Its PoS mechanism brings additional comprehensive yields, making it an asset that can both appreciate and generate income. However, the emergence of competitive chains may pose future threats to its market share, and the complexity of the protocol may introduce technical and security risks.

3. New public chain-type: Emerging public chains like Solana, with high performance and strong developer ecosystems, have become new "growth-type Layer-1" assets pursued by capital. Additionally, Solana's high staking yield and potential for ecosystem expansion provide DAT with opportunities for high returns. However, the technical and ecological stickiness of new public chain tokens may be less mature, leading to significantly higher volatility than Bitcoin and Ethereum, with narrative shifts or ecological security events potentially causing substantial asset value retracements, and long-term risk resistance still needs observation.

The long-term sustainability of DAT requires attention to the market recognition, utility value, technological maturity, ecological network effects, security, and market capitalization stability of the target assets. Overall, Bitcoin represents a strong consensus on value storage logic, but its passive holding characteristics amplify volatility; Ethereum embodies ecological and yield logic, providing DAT with a "margin of safety," while new public chain tokens like Solana represent high growth and high risk logic.

2.2 Holding Asset Operation Force

The rise of ecosystems like Ethereum and Solana has provided DAT companies with new models for on-chain monetization, meaning that DAT strategies are no longer dependent on "whether to hold coins," but rather on "how to operate held assets." Transitioning from passive beneficiaries of the market to active participants in the ecosystem, the stability of asset operations, governance capabilities, and risk management will become key determinants of long-term sustainability.

For companies, compared to the "passive holding" of Bitcoin DAT, Ethereum and Solana DAT, which participate in staking and on-chain financial activities, possess a certain margin of safety. When coin prices stabilize or slightly decline, as long as on-chain yields > cost of funds, the DAT model can self-generate cash flow; conversely, it will need to rely on price increases to maintain valuations.

For the on-chain ecosystem, Ethereum and Solana DAT's on-chain participation enhances network transaction volume and security, contributing to long-term price stability. The large-scale influx of institutional funds into the Ethereum ecosystem not only expands the scale of financial activities such as lending and trading but also enhances the liquidity of DeFi protocols, further promoting Ethereum to become the "standard for on-chain collateral assets." Taking Aave v3 as an example, ETH and wrapped stETH form a deep liquidity pool, and the participation of DAT companies can further enhance the depth of this pool, achieving compound returns on interest while improving market liquidity. Additionally, through staking, DeFi, LP, and other mechanisms, more Ethereum is locked for staking, reducing market circulation and increasing network decentralization and security, while long-term locked funds also help stabilize prices and reduce speculation.

With the popularity of the DAT model, the daily transaction volume on the Ethereum mainnet reached a new high in August 2025 (currently slightly falling to 1.55-1.70 million transactions/day), but thanks to most transactions migrating to L2 and blob expansion, total fees remain at near three-year lows. If corporate treasury capital enters the chain on a large scale, its high-value transactions on the Ethereum mainnet (L1) may boost overall block space demand and fee income, forming a positive cycle of "treasury activity - liquidity enhancement - on-chain utilization increase."

In summary, the "on-chain" aspect of DAT has the following ecological feedback mechanisms:

1. Increased demand for block space → Enhanced validator income → Strengthened network security;

2. Enhanced fund liquidity → Reduced risks of DeFi protocols → Increased user retention;

3. Improved on-chain transparency → Enhanced trust from institutional investors → More capital inflows.

However, the potential for returns brought by automation coexists with systemic risks. Large-scale institutional staking and leveraged participation may also drive up competition for on-chain yields, leading to a decline in staking returns as overall participation rates increase. Meanwhile, DeFi protocols still face potential threats from smart contract vulnerabilities, liquidation risks, etc. In bear markets, if institutional treasuries withdraw concentrated liquidity, decentralized exchanges may lack the depth to support large sell-offs, triggering "on-chain cascades."

Therefore, a sustainable DAT model needs to establish mechanisms for risk diversification and yield balance, such as: reducing exposure to a single coin through multi-asset portfolios; implementing tiered staking strategies (partially locking for the long term, partially retaining liquidity); or collaborating with CeFi platforms to build a mixed yield structure of on-chain + off-chain. These measures will be key safeguards for DAT to achieve robust "asset operation capabilities" in the on-chain ecosystem.

2.3 Company Fundamental Support Force

The sustainability of DAT also depends on whether it possesses a healthy operational foundation, which determines whether the company can "self-generate survival" during downturns in the crypto market and establish long-term investor confidence. We categorize them into strong-support and weak-support DAT types:

1. Strong-support DAT, like Strategy, has stable software business cash flow, allowing it to maintain debt repayment capabilities during crypto bear markets. Similarly, if SOL ecosystem DAT relies on staking income as a long-term cash flow source, it can also partially hedge against asset price volatility risks.

2. Weak-support DAT refers to pure shell companies or SPAC structures, where the absence of a main business and insufficient cash flow can easily lead to a cycle of "relying on debt issuance to maintain." Once the market cools or financing is interrupted, such companies often become high-risk targets for failure.

When analyzing company fundamentals, it is essential to carefully assess the following points: First, does the company have non-crypto-related cash flow sources? Second, can it cover financing interest and operating expenses? Third, is the financial structure robust (leverage ratio, cash position)? If DAT lacks fundamental support and relies solely on asset price increases or capital narratives, the fragile "shell" will struggle to withstand market fluctuations, potentially facing liquidation risks in bear markets.

2.4 Regulatory and Compliance Force

As DAT companies are publicly listed, they face strict regulations regarding investor protection and transparency, similar to other listed companies. The evolution of the regulatory framework is gradually becoming a key variable for the sustainability of the DAT model.

With the increasing recognition of compliance for digital assets in recent years, some jurisdictions have begun to acknowledge the legality of holding digital assets, providing DAT with a more stable disclosure and auditing environment. Starting in 2024, updates to FASB accounting standards have changed the strategic significance of DAT companies—allowing companies to measure digital assets at fair value, directly enhancing financial report transparency and asset valuation space. Before this change, companies like Strategy had classified their held cryptocurrencies as intangible assets, meaning that when Bitcoin prices fell, it would permanently lower the value of their holdings, only recognizing gains upon selling tokens (though Michael Saylor vowed never to do so). This change means that DAT companies using GAAP can recognize the unrealized changes in the accumulation value of their digital currencies. However, the change in accounting standards is also a double-edged sword, as significant price fluctuations in cryptocurrencies may lead to substantial increases in quarterly earnings, but could also result in massive losses.

Some market analysts believe that the formation of future DAT companies may no longer occur through SPACs but rather through mergers with legitimate enterprises, although the "de-SPAC" process may be chaotic, requiring shareholder votes, regulatory filings, and various efforts [12]. As more DAT continue to emerge in the market, consolidation has already begun. In September 2025, Strive (NASDAQ: ASST) announced an all-stock acquisition of Semler Scientific (NASDAQ: SMLR), marking the first merger of two publicly traded Bitcoin treasury companies. Upon completion of the merger, the new entity will integrate both parties' Bitcoin assets, enhancing "BTC per share" and improving financing capabilities in the capital markets. This transaction is seen as a landmark event signaling the entry of the DAT field into a "consolidation phase," indicating that DAT may usher in the next stage of development [13].

However, announcing a strategic reserve of digital assets does not equate to having the key to unlock wealth. Nasdaq or the New York Stock Exchange has high requirements for market capitalization and information disclosure; shell-type DATs that fail to meet these standards may ultimately be forced to delist. For example, the stock price of Windtree Therapeutics, a BNB treasury company, fell by over 90% within a month, no longer meeting Nasdaq's minimum price requirement of $1.00 per share and facing delisting [14]. Additionally, there are increasing doubts regarding asset bubbles and insider trading among DAT companies. On September 24, 2025, the SEC and the Financial Industry Regulatory Authority (Finra) jointly announced investigations into over 200 publicly listed companies that had announced crypto treasury plans, citing "abnormal stock price fluctuations" occurring before the release of related news [15]. Similarly, the potential existence of insider trading has led to a collapse of trust among some investors in DAT. For instance, MEI Pharma (later renamed Lite Strategy Inc.) announced a $100 million Litecoin treasury strategy on July 18, 2025, but its stock price had already shown abnormal increases around July 16, prior to the announcement.

Despite over 200 companies announcing crypto treasury strategies in 2025, covering BTC, ETH, SOL, BNB, TRX, and other chains, funds and valuations are rapidly concentrating towards a few companies and assets, accelerating the formation of a head effect. We believe that while Bitcoin DAT and Ethereum DAT occupy a significant portion of DAT companies, ultimately, there may only be one or two companies that can truly emerge from each asset category, while the remaining projects may struggle to achieve scale competition.

2.5 Investor and Liquidity Force

The valuation level of DAT ultimately depends on market liquidity and investor structure. From the current investor structure, although some larger DAT companies attract institutional buyers by including their stocks in tracking funds, the majority of DAT buyers are retail investors. For retail investors, buying DAT stocks allows them to indirectly participate in the crypto market while avoiding direct holding risks, but this may also be one of the factors leading to greater trading volatility.

Strategic capital, such as crypto funds and family offices, also has demand for leveraging returns through DAT to allocate Web3 assets, but the proportion of institutional investors varies significantly among different DAT companies. Specifically, large-cap, liquid companies are more likely to be allocated by public funds, pension funds, and quantitative funds. For instance, the leading Bitcoin DAT Strategy has a relatively high institutional ownership ratio, with institutional investors accounting for 58.84% as of October 8, 2025 [16]. Before ETFs for Ethereum and other public chains are fully opened, institutional investors often view DAT as a compliant exposure to digital assets, but relatively, some Ethereum DAT and small-cap DAT have generally low institutional ownership ratios, such as Sharplink's institutional investor ratio of 13.75% and BTCS's institutional investor ratio of only 3.48%.

From the liquidity structure perspective, the liquidity of DAT does not solely depend on the scale of its held on-chain assets but rather on the differences in investor structure. Institutionally dominated DAT typically possesses stronger capital stability and trading depth, with institutional investors aiming for long-term allocation or asset substitution, showing lower sensitivity to short-term market fluctuations, thus buffering the concentrated release of asset sell pressure to some extent. During market volatility, these DAT companies are more likely to manage risks through over-the-counter trading or hedging, maintaining a more stable market cap performance during periods of fluctuation.

In contrast, retail-dominated DAT companies have more dispersed circulating shares but exhibit extreme fluctuations in trading sentiment. When market expectations shift or token prices decline, they are prone to synchronized emotional sell-offs. Therefore, once these retail-dominated DATs collectively reduce their holdings, their on-chain positions may be rapidly magnified through decentralized exchanges with insufficient liquidity, leading to "stair-step" price declines. Especially in assets like Ethereum, which have relatively layered liquidity, large treasury holdings' on-chain releases often trigger nonlinear price reactions—even if the sell-off scale accounts for only a tiny proportion of the token's circulating supply, it may cause severe fluctuations due to insufficient market absorption capacity.

Overall, the future financing sustainability of DAT depends on its ability to attract institutional, long-cycle investors (such as ETFs, family offices, sovereign funds) to reduce financing sensitivity under market volatility. We believe that as the compliance and regulatory mechanisms for digital assets and DAT continue to improve, the liquidity structure of institutional funds entering DAT is expected to shift from being driven by sentiment to being driven by asset allocation, leading to a convergence in market volatility.

VI. Conclusion

The DAT model, as a new trend combining crypto and traditional finance, essentially serves as a "mapping mechanism between capital markets and on-chain assets." In bull market cycles, the appreciation of target assets, smooth financing, and rising investor risk appetite make DAT a typical amplifier of both valuation and sentiment. However, historical experience shows that this model is prone to encounter dual pressures of financing interruptions and asset depreciation in bear market environments, potentially shifting the flywheel from positive feedback to negative cycles.

The sustainability of DAT ultimately depends on five key pillars: 1. Whether the chosen digital assets by DAT companies possess long-term value and sustainable income capabilities; 2. Whether DAT is passively holding or can actively operate assets to create cash flow; 3. Whether the quality of DAT companies has a main business and stable cash flow to buffer against asset volatility; 4. Policy changes regarding compliance disclosures, accounting standards, and fair value measurements will determine whether DAT can be accepted by mainstream capital in the long term; 5. Whether the concentration and specialization of the investor structure in DAT companies can withstand significant liquidity fluctuations.

Despite over 200 companies announcing crypto treasury strategies in 2025, covering BTC, ETH, SOL, BNB, TRX, and other chains, funds and valuations are rapidly concentrating towards a few companies and assets, accelerating the formation of a head effect. Looking ahead, the winners in DAT will not be numerous "shell companies" primarily focused on speculation but rather those enterprises capable of forming a solid flywheel at both the ecosystem construction and capital market ends. They will not only effectively allocate capital and generate on-chain yields but also win institutional investors' trust through transparent governance and robust finances. Similarly, in each mainstream asset track, there may ultimately only be one or two winners.

DAT remains in the early stages of financial innovation, and its path is destined to be accompanied by high volatility and uncertainty. However, from a longer-term perspective, the value of DAT lies not in short-term price leverage but in its potential to become a stable bridge connecting the crypto economy and traditional capital markets.

References

• [1] YouTube, https://www.youtube.com/watch?v=b0KU4cJgj6g

• [2] Cointelegraph, https://cointelegraph.com/news/worlds-biggest-business-intelligence-firm-buys-21k-btc-for-250m

• [3] Bloomberg, https://www.bloomberg.com/news/articles/2020-12-07/microstrategy-to-raise-400-million-to-buy-even-more-bitcoin

• [4] Bitcointreasuries.net, https://bitcointreasuries.net/

• [5] PR Newswire, https://www.prnewswire.com/news-releases/bitmine-immersion-now-holds-approximately-500-million-of-ethereum-to-advance-its-ethereum-treasury-strategy-302504282.html

• [6] Coingecko, https://www.coingecko.com/zh/treasuries/%E4%BB%A5%E5%A4%AA%E5%9D%8A/companies

• [7] CoinDesk, https://www.coindesk.com/business/2025/07/08/crypto-treasury-firm-reserveone-going-public-in-1b-spac-deal

• [8] NASDAQ, https://www.nasdaq.com/press-release/mega-matrix-announces-diversify-dat-strategy-basket-leading-stablecoins-and

• [9] AInvest, https://www.ainvest.com/news/solana-news-today-institutional-capital-shifts-public-companies-turn-solana-digital-treasury-standard-2508

• [10] Yellow, https://yellow.com/news/cantor-fitzgerald-sees-dollar250-million-potential-in-solana-treasury-companies

• [11] Coinrank, https://www.coinrank.io/crypto/2-65-billion-solana-dat-plan/

• [12] CoinDesk, https://www.coindesk.com/markets/2025/09/28/from-spacs-to-cash-flow-buys-how-dats-are-plotting-the-next-growth-phase

• [13] Yahoo!Finance, https://finance.yahoo.com/news/strive-semler-scientific-merge-stock-145427057.html

• [14] The Block, https://www.theblock.co/post/367721/nasdaq-to-delist-bnb-token-treasury-company-windtree-therapeutics-for-noncompliance

• [15] Cryptopolitan, https://www.cryptopolitan.com/sec-finra-probe-crypto-treasury-stock-spikes/

• [16] MarketBeat, https://www.marketbeat.com/stocks/NASDAQ/MSTR/institutional-ownership/

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