Author: Will Owens, Galaxy Research Analyst; Jianing Wu, Galaxy Research Assistant; Translation: @金财经xz

The digital asset treasury (DAT) craze of the summer of 2025 has given way to more challenging market conditions. Asset prices continue to fall, with the market-to-book value ratio (mNAV) compressed to a level close to 1, and multiple digital asset treasury companies have sold assets to buy back shares to support their stock prices (for example, ETHZilla sold $40 million worth of ETH in October 2025 to finance its buyback plan, while French Bitcoin holding company Sequans liquidated BTC positions the following month to repay debt). This development reveals a deeper structural problem: with the “raise-buy-add” flywheel stalled, it is unclear whether the DAT model, which is premised on providing exposure to crypto assets through open market instruments, is sustainable.

Although the digital asset treasury (DAT) field covers a wide range and includes a variety of crypto-assets (of which Bitcoin accounts for significantly more than 75%), this article focuses on DATs that hold proof-of-stake (PoS) assets. We believe that the next generation of DAT - which we call DAT 2.0 - must create business value like any other company in order to support its stock price. PoS-type DAT has unique advantages in this regard. Unlike passive holding structures, they can create differentiated business models by pledging assets to generate income and accumulate value based on holding tokens. Their value logic has gone beyond simple asset exposure.

1. Current situation overview

In our first DAT report, statistics showed a total of 105 companies holding 13 tokens. Since then, the different types of tokens held by DAT have expanded to at least 27.

The following table shows the top ten publicly traded holders of Ethereum (ETH) and Solana (SOL) as of April 8 (mainly but not exclusively DAT).

2. Profit and loss accounting

When discussing value creation, we can analyze whether the model is valid from the perspective of cost and benefit.

Cost

The cost of operating a digital asset treasury (DAT) can be summarized as the following formula:

Cost = Token acquisition cost + Fund raising cost + Operational management fee + Opportunity cost

Token acquisition cost: funds used to acquire tokens and build asset reserves.

Fund raising costs: To raise funds to purchase tokens, DAT uses a variety of equity and debt instruments for financing: including market offerings (ATMs), post-listing private equity investments (PIPEs), equity lines of credit (ELOCs), convertible notes, warrants and preferred shares. Different instruments have different cost burdens: Debt instruments generate interest payments and have contractual obligations attached to them, while equity issuances result in shareholder dilution.

Operation and management expenses: the costs incurred for managing, keeping and reporting DAT positions. This includes the business operating costs set up to manage DATs, as well as the cost of custody (many DATs outsource this business to third-party custodians).

Opportunity cost: The return that might have been generated if the funds had not been invested in the DAT strategy.

Revenue

To offset these costs, Digital Asset Treasury (DAT) needs to generate revenue through multiple channels. Currently, most proof-of-stake (PoS) DATs mainly rely on token appreciation. However, in addition to passively holding coins, DAT can also create additional value in a series of ways: running its own verification node infrastructure, deploying funds to decentralized finance (DeFi), investing in or acquiring related companies that support the ecosystem.

Income = token appreciation + staking income + MEV and priority fee income + DeFi income strategy + investment return

Token appreciation: the benefits brought by the increase in the price of native assets. This is the primary driver of current DAT equity performance.

Staking income: The income obtained by staking the native assets of the protocol as a network verification node (the current annualized rate of return of Ethereum ETH is about 3%, and Solana's SOL is about 7%).

MEV and priority fee income: The additional income that verification nodes can obtain by reorganizing, packaging or excluding transactions in the block.

DeFi income strategy: the returns generated by actively deploying asset reserves to on-chain protocols.

Return on Investment: Earnings generated by investing balance sheet funds in strategic investments, including minority stakes, acquisitions, and seed investments in ecological businesses.

3. Business model

(1) Active asset reserve management

If you operate a digital asset treasury (DAT) that holds Proof of Stake (PoS) assets, staking income is the most basic source of income. Any user can obtain basic issuance rewards through delegated verification nodes, but this is not a differentiated business model and cannot support valuation premiums alone. In order for DAT to continue operating during market downturns, it needs to obtain operating cash flow that is recyclable and at least partially decoupled from the token price. This means that asset reserves should be viewed as productive assets rather than static holdings.

The strategies that PoS-type DATs can adopt vary in complexity, and not all DATs need to try every strategy. But the strategic toolbox exists, and the DATs that will survive in the current environment are likely to be those institutions that move beyond a passive holding model.

(2) Basis trading

The simplest active strategy is basis trading: when the funding rate is positive (that is, longs pay fees to shorts), long the spot asset (DAT is already held) and short the perpetual contract. For long-term long-term DAT, the actual cost of the spot position is zero. Income comes from the funding rates charged. During the bull market, the historical average annualized rate for assets such as SOL and ETH is about 5% to 15%, but it will narrow or even turn negative during the market downturn. Such trades can be executed via perpetual contracts on crypto-native platforms or contracts listed on the Chicago Mercantile Exchange (CME), which provide clearer counterparty risk. This is not an innovative strategy (it is already widely used by crypto-native funds and market makers), but for DAT it is a natural and low-cost extension of its balance sheet.

The main risks are basis blowout and margin calls. If the price difference between spot and futures expands sharply and is not conducive to the direction of the position, DAT may face a margin call, forcing the company to close its position at the most unfavorable time. The infrastructure requirements for this strategy are simpler than those discussed later.

(3) MEV capture

MEV (Maximum Extractable Value) refers to the additional value a validator can capture by reordering, packaging, or excluding transactions within a block. This includes priority fees, liquidation proceeds (earning rewards for closing out undercollateralized loans), and sandwich attacks (inserting transactions before and after user trades to manipulate execution prices and capture value). For PoS networks with active on-chain activity (such as Solana, Ethereum, BNB Smart Chain, and Base), MEV revenue can significantly exceed basic staking revenue. DATs that only entrust tokens to third-party verification nodes can receive basic issuance rewards and possible priority fee sharing; while DATs that run their own verification node facilities and actively participate in the MEV supply chain can directly obtain block-level income.

As Coinbase’s David Duong wrote: “Future iterations of DAT will focus on the business of professional trading, storage and access to sovereign block space.”

The barriers to entry in this field are quite high. Running a competitive validator node requires dedicated infrastructure, low-latency connectivity, and highly specialized engineering talent. But for DATs with corresponding scale and technical ambitions, capturing MEV may be the most direct first step to go beyond staking and generate native operating income on the chain.

(4) Self-operated automated market maker

For DAT, which has strong technical strength, a more ambitious path is to operate a self-operated automated market maker.

There are fundamental differences between self-operated AMMs and traditional AMMs such as Orca or Raydium: self-operated AMMs do not pool passive liquidity from external depositors, but are customized on-chain programs operated by a single entity, which are deployed using their own funds and embed market-making strategies directly into the blockchain runtime environment. Pricing is actively managed through lightweight oracle updates rather than passively determined by the bonding curve. The result is often tighter spreads, greater capital efficiency, and execution quality that in most cases is comparable to that of centralized exchanges.

Self-operated AMM mainly captures clean and pollution-free retail order flow (which is the most profitable type of order flow for market makers).

For PoS-type DATs holding large SOL or ETH positions, the opportunity is obvious. Rather than entrusting tokens to others or providing liquidity to existing AMMs and bearing impermanent losses, DAT can deploy positions into its own self-operated AMMs.

However, the threshold is high. Operating a competitive self-operated AMM requires deep on-chain market microstructure knowledge and customized Solana program development capabilities. Competition in this space is fierce, and even small efficiency improvements in oracle update speeds or computational optimization can determine whether a trading venue receives order flow or is eliminated from the market. This is obviously not a strategy that works for all DATs, but for institutions with technical talent and ambition, self-operated AMMs are one of the most efficient ways to generate ongoing on-chain revenue capital.

(5) AMM Liquidity Supply

Alternatively, a Digital Asset Treasury (DAT) can act as a liquidity provider (LP) to deploy funds into existing automated market makers. This is riskier than self-operated AMM, but the technical requirements are relatively low. Building centralized liquidity positions on platforms such as Orca (Solana) or Uniswap (Ethereum) can generate significant fee income, especially on high-volume trading pairs. Unlike passive full-scope liquidity, concentrated positions allow DATs to allocate funds within specific price ranges, thereby increasing capital efficiency and fee returns (but also increasing the precision required for position management).

The core risk of this strategy is impermanent loss: if the price of the underlying asset deviates significantly from the selected range, the return on the liquidity-providing position will be lower than the performance of simply holding the asset. For DATs whose primary goal is to gain exposure to a token, this trade-off needs to be carefully calibrated. Positions need to be actively monitored and rebalanced, which requires DAT to have an in-house trading team or a reliable automation infrastructure.

Nonetheless, for DATs holding large positions in tokens that are idle except for staking, deploying some of the funds into centralized liquidity can generate incremental gains and achieve significant compounding effects over time.

(6) Liquidation Arbitrage

DAT with internal trading capabilities can also participate in the liquidation arbitrage of lending agreements. When borrowing positions on platforms such as Aave, Compound or Kamino are undercollateralized, their positions will be liquidated at a discount. But this process is not completely automatic. Participants, known as "liquidators," identify eligible positions, pay off borrower debt, sell collateral assets, and capture the spread between the discounted collateral and market value. For DATs that already have verification nodes and trading infrastructure, adding liquidation monitoring is an incremental capability (although this requires low-latency execution and strict risk management to avoid taking on unintended assets in volatile markets).

(7) Strategy Spectrum

The key difference is between passive and active asset reserve management. DATs that delegate their tokens to others and only receive staking rewards are operating a passive balance sheet. DATs that autonomously run verification nodes, capture MEV, provide centralized liquidity, perform basis trading or participate in clearing are actively managed.

The latter strategy generates diversified, sustainable cash flows with low correlation to token prices, which is what these companies need to maintain trading at a premium (above NAV) when market sentiment deteriorates.

The risk of each strategy is proportional to its complexity:

The strategies at the top of the table are the easiest starting points. Basis trading has the lowest technical requirements and can be implemented by almost any DAT with basic operational capabilities. MEV capture and proprietary market makers are at the other end of the spectrum, and while offering the highest revenue potential, require engineering teams and infrastructure – something most DATs currently don’t have.

For any particular DAT, the appropriate approach depends on the team's expertise and risk tolerance. The broader implication is that even DATs that build only some of these capabilities are structurally differentiated from those that maintain a pure asset reserve agency model.

(8) The integration trend of foundations and DAT

The Protocol Foundation is a management organization that supports the development of blockchain networks and achieves its mission by funding ecological projects, coordinating protocol upgrades, and managing fund reserves. Foundations are typically net sellers of their own tokens and regularly liquidate their holdings to raise operating capital.

The Ethereum Foundation is a typical example. It issued a formal capital reserve policy in June 2025, setting annual operating expenses at 15% of reserves and maintaining cash reserves for 2.5 years. Its regular sales of ETH, both before and after policy releases, have sparked continued criticism from the community, especially when sales are executed without advance announcement.

DAT is different. They are structurally net buyers, accumulating tokens through equity issuance and debt financing to provide shareholders with crypto asset exposure. DAT can therefore serve as a quasi-banking role for the protocol: deploying balance sheet funds into structured capital strategies to generate revenue, support ecological liquidity, and create a virtuous cycle between DAT performance and protocol growth.

We are seeing an increasingly symbiotic relationship between these two types of organizations. The Ethereum Foundation has twice sold ETH directly to corporate reserve buyers via over-the-counter (OTC) transactions: 10,000 ETH (approximately $25.7 million) to SharpLink Gaming in July 2025 for approximately $2,572 per coin; most recently on March 14, it sold 5,000 ETH (approximately $10.2 million) to BitMine Immersion Technologies for approximately $2,043 per coin. DAT thus obtains a reserve of assets, while the Foundation receives cash to support its work.

Sui Group (NASDAQ: SUIG), a DAT related to the Sui blockchain ecosystem, provides a more institutionalized practical case for this integration trend. SUIG is the only Nasdaq-listed company that has a formal partnership with the Sui Foundation, occupying a unique position in the ecosystem. Since August 2025, it has accumulated more than 108 million SUI tokens. In addition to staking, SUIG has also ventured into the stablecoin space, partnering with Ethena and the Sui Foundation to launch Sui’s native synthetic U.S. dollar, suiUSDe. This is the first collaboration between a publicly traded DAT, a blockchain foundation and a stablecoin issuer. 90% of the fees generated by suiUSDe are returned to SUIG and Sui Foundation for repurchasing SUI in the open market or reinvesting in Sui native DeFi. The stablecoin is deployed as collateral on DeepBook and other Sui decentralized exchanges, creating a direct positive feedback loop between stablecoin adoption and ecosystem growth.

The SUIG model reveals a more mature prospect for DAT-Foundation cooperation: shared infrastructure, incentive compatibility, cost sharing, and ultimately a win-win situation for both parties. An efficient DAT can strengthen protocol marketing, release on-chain products, and become the main liquidity tool of the ecosystem. In a more advanced model, DAT may even consider formally merging with the foundation, but the legal and regulatory complexity of such an unprecedented arrangement will be very high.

(9) Traditional finance and treasury

Digital Asset Treasury (DAT) is facing the opportunity to reshape its position: from a passive accumulation of tokens to an active capital allocator at the intersection of decentralized finance and traditional finance. With significant token holdings already on its balance sheet, DAT is well-positioned to provide startup capital for the financial infrastructure that connects these two worlds.

Treasury is an example. This type of smart contract-based fund pool can deploy assets on the chain according to preset strategies. Common strategies include lending, liquidity provision, basis trading and structured products. The income generated will be distributed to depositors. The vault is programmable, transparent, and composable. As more and more assets are put on the chain, its total assets under custody continue to grow—Morpho, one of the leading treasury platforms, currently manages nearly $4.1 billion in assets. As AI robot agent trading matures, vaults are expected to become the preferred tool for automated capital allocation and become more popular.

For DAT, providing start-up capital to the treasury is a direct path to obtain diversification benefits. By providing initial capital, DAT can obtain a share of the treasury and participate in the income distribution of the underlying strategy. In fact, when traditional financial products are tokenized and put on the chain, DAT can be positioned as the capital supplier. Depending on the composition of its own balance sheet, DAT can either directly deposit native tokens into matching asset vaults, or use them as collateral to borrow stablecoins to participate in fiat currency pricing strategies—obtaining returns without having to build infrastructure from scratch.

(10) Affiliated business

One of the core ways for Digital Asset Treasury (DAT) to achieve sustainability is to create income outside of token holdings. One way is to invest in or acquire listed or unlisted companies that can generate continuous cash flow and support the underlying protocol. Different from passive asset management, but similar to providing startup capital to the treasury, this model treats DAT's balance sheet as productive capital that can be invested in companies that are strategically synergistic with the ecosystem on which DAT relies. Two early examples illustrate this model in action: Bitmine’s $200 million investment in Beast Industries, and Nakamoto’s acquisition of BTC Inc. and UTXO Management.

Bitmine invested $200 million in MrBeast’s media platform Beast Industries in January. The strategic logic is twofold: MrBeast's platform itself is an attractive investment opportunity. Parent company Beast Industries, which closed the round at a valuation of about $5 billion, has annual revenue of more than $400 million, driven largely by its snack brand Feastables. With its media business expected to account for just a fifth of total revenue by 2026, Beast Industries is transitioning from a content creator to a diversified consumer products company. With one of the largest and most interactive audiences on the internet, this partnership creates a natural marketing channel for Ethereum – combining the world’s largest social media creators with what Bitmine considers to be the leading platform for finance of the future. Beast Industries’ recent acquisition of Step, a crypto-friendly fintech app targeting young users, further demonstrates its deep expansion into financial services. As Beast Industries expands into crypto services, the synergy between the two is expected to further boost Ethereum’s popularity in the mass market.

Nakamoto's model illustrates this model more clearly. Through its acquisitions of BTC Inc. and UTXO Management, it has built an ongoing revenue base outside of its asset reserve exposure. BTC Inc. brings scale: Management estimates that in fiscal 2025, BTC Inc. and UTXO’s combined revenue will be approximately $78 million. BTC Inc. alone saw revenue growth of 106% last year. The company has about 6 million social media followers and generated 1.13 billion social traffic in 2025, with its flagship conference series attracting about 67,000 attendees that year. Its best-known media brand is Bitcoin Magazine, one of the oldest publications in the field. UTXO Management had $128 million in assets under management as of January 31, and Nakamoto Investors reported that it outperformed Bitcoin by 59% in returns last year.

Although these figures are still limited relative to the size of Nakamoto’s asset reserves (5,398 BTC, worth approximately US$360 million), they have brought operating cash flow that is not directly linked to short-term Bitcoin prices, while deepening Nakamoto’s layout in the Bitcoin ecosystem through media, events, and asset management.

The encryption ecosystem contains many unlisted companies with strategic value: infrastructure providers, developer tool companies, wallet service providers, media platforms, and ecosystem builders that are not yet ready or immature to go public. For DATs, this creates a natural role for them, from corporate acquirers to strategic investors, committing balance sheet capital to companies that can both generate returns and enhance the underlying protocols of their token holdings. The targets with the greatest value-added potential are those companies that can promote the use of tokens, expand the popularity of the protocol, or support ecological participants. For those businesses that do not yet meet the listing criteria but are interested, DATs can become an important capital partner and build a business footprint that differentiates them from a single-dimensional asset-backed agency model.

4. Conclusion

The digital asset treasury (DAT) mania of 2025 is driven by a powerful narrative: Public companies accumulating crypto assets on their balance sheets constitute a compelling new investment vehicle that can compound interest through repeated financings and token purchases. Investors paid a bubble premium for this narrative, buying DAT stock at a premium to market-to-book value (mNAV) in anticipation that the flywheel would continue to turn. As asset prices fall and the flywheel stalls, premiums are compressed and narrative alone is no longer enough to support valuations.

DATs that survive will need to prove their value as an operating entity, not just a token holding vehicle. For Proof-of-Stake (PoS) DATs, staking is the natural starting point, but the opportunities go beyond that: verification node infrastructure, DeFi revenue strategies, foundation cooperation, and derivative business investments. DATs that carefully explore these paths are most likely to achieve sustained trading premiums above net asset value (NAV).

For those DATs that are unable or unwilling to transform, industry consolidation will be a possible outcome. As we discussed in our 2026 Forecast Report, large DATs holding more tokens and with stronger access to capital markets will acquire smaller peers, absorbing their asset exposure and eliminating redundant costs. The first wave of consolidation may bring share price premiums to participants, but this window won't last long. DAT, which remains positioned as a passive tool, will face an increasingly narrow living space. In this new phase, scale and operational depth will determine who survives. The law of survival of the fittest has been activated, and only those with both wisdom and size can endure. Either give investors a reason to pay a premium for your shares, or get out of the business.