Introducing CHAD: Digital Credit Comes to Solana

Bitcoin proved the digital credit model; we believe Solana can take it further.

September 09, 2026 • Estimated Reading Time: 10 minutes

Introducing CHAD: Digital Credit Comes to Solana

This week, DeFi Development Corp. launched CHAD on Nasdaq, our Variable Rate Series C Perpetual Preferred Stock and the first variable-rate digital credit preferred backed by a non-bitcoin digital asset treasury.

CHAD was built around a relatively simple thesis: bitcoin treasury companies have shown that a volatile digital asset can support an entirely different type of security for investors who prioritize income and lower volatility over direct exposure to the underlying asset. Strategy pioneered that model with its growing suite of digital credit instruments, including STRC, and Strive extended it with SATA. With CHAD, we are bringing that model to Solana for the first time.

Unlike bitcoin, SOL can be staked to generate recurring economic income while remaining part of DFDV’s treasury, making SOL uniquely well suited to digital credit. SOL itself can perform two jobs simultaneously: appreciate alongside the growth of the Solana ecosystem while also generating income that can help support the preferred dividend. This means CHAD is the first variable-rate preferred instrument that doesn't depend on common equity dilution or sales of the underlying asset to meet payment obligations.

For DFDV, however, CHAD is about more than launching a new financial product. It represents another capital markets engine designed to help us pursue the objective at the center of our treasury strategy: growing SOL Per Share (SPS).

What Is CHAD?

CHAD is DFDV’s Variable Rate Series C Perpetual Preferred Stock, designed as an exchange-traded income security with a variable dividend mechanism and no stated maturity date.

The initial offering was priced on September 3, 2026, with the following key terms:

  • 1,375,000 shares offered at $8.00 per share

  • Approximately $11.0 million in gross proceeds before underwriting discounts, commissions, and offering expenses

  • A $10.00 stated amount per share

  • An initial annual dividend rate of 13.00% calculated on the $10 stated amount

  • Cumulative dividends, with regular dividends designed to be paid each business day, when, as, and if declared

  • A variable dividend rate, subject to the terms described in the prospectus

  • No stated maturity date

  • A 30-day underwriter option to purchase up to an additional 206,250 shares

The issuance and sale of CHAD is expected to settle on September 8, 2026, subject to customary closing conditions. Because CHAD was priced at $8.00 while the initial 13% annual dividend is calculated on a $10 stated amount, an investor purchasing at the IPO price would begin with an effective annual yield of approximately 16.25%, assuming the dividend rate remained unchanged and dividends were declared and paid as contemplated.

CHAD is also designed to pay regular dividends daily on each business day, making it, to our knowledge, only the second publicly traded security ever introduced with daily dividend payments. At the IPO price, we also believe CHAD represents the highest effective-yielding preferred security ever introduced with a daily dividend structure.

We believe the frequency matters. Traditional preferred securities generally distribute dividends monthly or quarterly. CHAD brings that income stream much closer to the always-on nature of digital assets, combining a high initial effective yield with daily distributions in a liquid, exchange-traded security.

The first regular dividend payment is scheduled for October 1, 2026, after which regular dividends are designed to be paid each business day, when, as, and if declared. DFDV also intends to establish a dedicated dividend reserve at closing equal to $1.30 per CHAD share, representing the first 12 months of dividends assuming a 13% annual rate. For the base offering, that equates to approximately $1.79 million earmarked for the reserve, funded with existing cash and cash equivalents, financial instruments, and/or digital assets.

Digital Credit, Now Powered by Solana

Digital credit is still a relatively new category, but the basic idea is straightforward. A digital asset treasury can use its capital structure to transform part of the economics of a volatile digital asset into an income-oriented security designed for a different type of investor.

Take Strategy (Nasdaq: MSTR), for example. An investor buying MSTR common stock may seek amplified bitcoin exposure and be willing to accept significant equity volatility. An investor buying STRC, Strategy’s variable-rate preferred equity currently offering a 12% annual dividend, may instead prioritize income, liquidity, and greater price stability.

The difference becomes much clearer when looking at the actual return characteristics of these assets. Over a recent one-month period, bitcoin appreciated about 24%, while MSTR appreciated about 47%, demonstrating the amplification common equity can provide when the underlying asset moves higher. STRC, meanwhile, produced about 5% total return, including roughly 4% from price appreciation and about 1% from its dividend, while showing substantially lower volatility than either bitcoin or MSTR.

That difference is the point. These instruments are not trying to produce the same outcome:

  • BTC: Direct exposure to bitcoin and its underlying volatility.

  • MSTR: Amplified bitcoin exposure, with greater upside potential and greater equity volatility.

  • STRC: Income-oriented digital credit designed around yield, liquidity and greater price stability.

Rather than forcing every investor into the same risk and return profile, digital credit allows a treasury company to use its capital structure to serve multiple pools of capital. Strategy has demonstrated that common equity and preferred equity can coexist within the same digital asset treasury while appealing to investors with fundamentally different objectives.

CHAD brings that concept to Solana, but with an important difference: the underlying treasury asset is itself productive. Through Solana’s Proof-of-Stake consensus mechanism, SOL can be staked to help secure the network while generating staking rewards. DFDV also operates its own validator infrastructure and can use its crypto-native treasury expertise to pursue additional sources of organic yield.

For CHAD, this means SOL can potentially contribute to the structure in three ways:

  • Appreciation: If SOL appreciates, the value of the treasury supporting DFDV’s capital structure can increase.

  • Organic Income: Staking and validator operations can generate recurring economic yield that can help service preferred obligations.

  • Network Growth: Stablecoins, tokenized assets, payments, trading, and other onchain activity can potentially create long-term demand for Solana and SOL.

That is the fundamental difference we see between CHAD and the first generation of digital credit. Bitcoin demonstrated that a volatile digital asset could underpin an income-oriented security with a very different risk and return profile from the underlying asset or common equity. Solana adds another dimension because SOL can potentially appreciate and generate income at the same time.

This is also why we believe CHAD should be evaluated on more than its headline dividend. Investors should consider how much asset value sits behind the preferred, how much organic income that asset base can generate, how large DFDV’s obligations are relative to that income, and how resilient the capital structure may be during a significant SOL drawdown.

As discussed in our CHAD presentation, our pro forma analysis showed substantial SOL asset coverage relative to both annual obligations and CHAD notional under the assumptions presented, including hypothetical scenarios involving significant declines in SOL. Those scenarios are not guarantees and will change alongside SOL prices and DFDV’s capital structure, but they illustrate how we approached the product: CHAD was designed around productive collateral and coverage, not simply a high headline yield.

To our knowledge, CHAD is the first publicly traded variable-rate digital credit preferred built around a non-bitcoin digital asset treasury. We believe that makes its launch an important test of a larger thesis: digital credit does not have to be exclusively a bitcoin phenomenon.

How CHAD Strengthens the DFDV Flywheel

For DFDV common shareholders, this is perhaps the most important part of the CHAD story. Our objective has never been simply to raise money and buy SOL. Our objective is to use the capabilities available to a public company, including staking, validators, onchain operations, and the capital markets, to increase the amount of SOL exposure attributable to each common share over time. We measure that through SOL Per Share (SPS), our longstanding North Star metric.

CHAD creates another potential source of capital with which to pursue that objective. The Company’s stated use of proceeds includes acquiring SOL, as well as strategic transactions, growth initiatives, and general corporate purposes. When capital can be raised on attractive terms, the flywheel can broadly work as follows:

  1. Raise capital through CHAD, common equity, or other attractive capital markets instruments.

  2. Acquire additional SOL, expanding DFDV’s treasury.

  3. Generate additional organic yield by staking, validating, and productively managing that SOL.

  4. Strengthen the capital structure, potentially supporting SPS growth and creating additional opportunities to access capital.

  5. Repeat the process when market conditions allow capital to be raised and deployed accretively.

This is where CHAD and DFDV common equity can become complementary capital markets engines. If CHAD develops a deep and liquid market and trades at levels where additional preferred issuance is attractive, DFDV may have the opportunity to issue additional CHAD and deploy that capital into more SOL. On the flip side, if DFDV common equity trades at levels where issuing shares can increase SPS, common equity can provide another source of accretive capital.

A larger SOL treasury can then generate more staking and validator income while increasing DFDV’s exposure to SOL appreciation. In turn, a larger and more productive treasury can strengthen the balance sheet and the asset base supporting the broader capital structure, potentially improving DFDV’s ability to access capital again.

Strategy has demonstrated how powerful this model can become when a company gains access to multiple pools of capital. MSTR's common equity, convertible securities, and preferred products, such as STRC, collectively form a capital markets platform that can reach investors with different objectives, with capital raised across that platform helping finance continued bitcoin accumulation. Simply put, CHAD gives DFDV the opportunity to build that capital-formation engine around Solana.

Intelligent Leverage Designed to Survive Volatility

CHAD also fits directly into what we describe in our SOL Boost framework as intelligent leverage. Many ways to amplify SOL exposure exist, but they carry very different risks. Take margin and perpetual futures, for instance. These tools can provide significant leverage, but they also introduce liquidation thresholds. A sufficiently large decline in SOL can force an investor out of a position at precisely the wrong time. Short-dated or heavily secured corporate borrowing can introduce similar vulnerabilities through maturity walls, collateral requirements, and refinancing risk. CHAD is structurally different; it has no stated maturity date and is not structured like a margin loan that automatically liquidates DFDV’s SOL treasury following a particular decline in the asset.

That combination gives DFDV access to incremental capital without introducing the same near-term forced-liquidation dynamics associated with more fragile forms of leverage. For an asset class where substantial drawdowns can occur even during a long-term secular bull market, we believe that durability matters.

The objective is not to maximize leverage at every moment. It is to build a capital structure that can survive periods of volatility while retaining upside exposure when the cycle turns.

At the same time, we believe there are moments when leaning into that leverage makes sense, and this may be one of them. In our view, SOL remains inexpensive relative to where we believe its value could be over the next 12 to 24 months as adoption across stablecoins, tokenized assets, payments, trading, and other onchain applications continues to expand.

That makes access to durable, non-liquidating capital particularly valuable today. If we can raise capital on attractive terms and deploy it into SOL at prices we believe materially understate its long-term potential, CHAD can allow DFDV to increase its SOL exposure today while preserving the ability to participate in that potential appreciation over time. That is what we mean by intelligent leverage: not simply borrowing more, but using the right type of capital, at the right time, against an asset we believe has substantial long-term upside.

Designed to Support CHAD Over Time

Another defining feature of CHAD is its variable dividend mechanism. CHAD begins with a 13% annual dividend rate on its $10 stated amount, but that rate is not necessarily fixed indefinitely. Subject to the restrictions in the governing documents, DFDV can adjust the regular dividend rate in response to market conditions.

Our current intention is to use that flexibility to maintain CHAD within a long-term trading range of $9.95 to $11.00 per share, although there is no guarantee CHAD will trade within that range and the Company’s intention may change.

Conceptually, if CHAD trades below the desired range, increasing the dividend rate could make the security more attractive to income investors. If it trades materially above the range, DFDV could adjust the dividend downward, subject to the terms of the security. The annual regular dividend rate may not be reduced by more than 50 basis points at a time.

Recent digital credit provides a useful precedent. STRC reached par approximately 99 days after issuance, with Strategy raising its dividend multiple times along the way. SATA reached par in approximately 72 days. While there is no guarantee CHAD will follow the same path, these examples demonstrate how a variable dividend can give issuers an active tool to support a preferred toward par.

DFDV also has the right, subject to the governing terms, to redeem some or all outstanding CHAD shares at $11.00 per share, or a higher amount selected by the Company, plus accumulated and unpaid regular dividends through the redemption date. The prospectus describes additional provisions governing clean-up redemptions, certain tax events, and fundamental changes.

Together with the dedicated 12-month dividend reserve and the organic yield potential of DFDV’s SOL treasury, these features were designed to give DFDV multiple tools for managing CHAD across different market environments.

One Treasury, Multiple Investors

Ultimately, CHAD gives investors another way to participate in the DFDV capital structure. A DFDV common shareholder may primarily be seeking amplified SOL exposure and SPS growth, accepting greater equity volatility in exchange for greater participation in the potential upside of the treasury strategy. A CHAD investor may instead prioritize income and a security that sits senior to common stock for dividends and liquidation preference.

In simple terms:

  • DFDV common equity is intended to provide an amplified expression of SOL exposure, driven by SOL performance, intelligent leverage, and SPS growth.

  • CHAD preferred equity is designed primarily for investors seeking income through a more senior security within the DFDV capital structure.

More efficient access to capital can enable additional SOL accumulation, and more SOL can generate additional organic yield and potentially appreciate. A larger and more productive treasury can strengthen the broader capital structure and potentially create additional opportunities to raise capital. That is ultimately our thesis for CHAD.

For DFDV, CHAD represents a new pool of capital that can potentially help us acquire additional SOL, generate additional organic yield, and compound SPS over time. For CHAD holders, it creates an income-oriented security backed by a treasury whose principal underlying asset can generate income; for the broader digital asset treasury market, it tests whether digital credit can expand beyond bitcoin.

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Important Disclosures: This communication is for informational purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase or sell any security, including the common stock or preferred stock of DeFi Development Corp. (“DFDV”). Any offering of securities by DFDV is made only by means of the applicable prospectus, prospectus supplement and other offering documents filed with the U.S. Securities and Exchange Commission (“SEC”). Investors should carefully review those documents, including the risks described therein, before making any investment decision. This communication contains “forward-looking statements” within the meaning of applicable federal securities laws. Forward-looking statements include, but are not limited to, statements regarding DFDV’s expectations, intentions, strategies and objectives concerning CHAD, the payment or adjustment of dividends, CHAD’s trading price or targeted trading range, future issuances of CHAD or common equity, the use of proceeds, the acquisition and staking of SOL, validator and other treasury operations, organic yield, SOL Per Share (“SPS”) growth, future access to capital, the development of DFDV’s capital markets strategy and the potential performance, adoption or growth of Solana and digital credit. These statements are based on current expectations and assumptions and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied. DFDV undertakes no obligation to update any forward-looking statement except as required by law. There can be no assurance that DFDV will successfully execute the strategies described herein; that additional issuances of CHAD, common stock or other securities will be available or economically attractive; that capital raised will result in accretive SOL or SPS growth; that staking, validator or other treasury activities will generate expected yields; that SOL will appreciate in value; that CHAD will trade within any particular range, including DFDV’s currently intended long-term trading range; or that dividends will be declared or paid at any particular rate or frequency. Dividends on CHAD are subject to declaration by DFDV’s Board of Directors or an authorized committee thereof and the terms of the applicable governing documents. References to yields, asset coverage, effective yields, hypothetical scenarios, historical results, other issuers or securities, and potential capital markets outcomes are provided for illustrative and informational purposes only. Historical performance and the performance of other securities, including securities issued by Strategy Inc. or Strive, are not indicative of future results or the future performance of CHAD, DFDV common stock, SOL or any other security or digital asset. Digital assets and securities related to digital assets involve significant risks, including substantial price volatility and the potential loss of principal. Readers should review DFDV’s filings with the SEC, including the applicable prospectus and prospectus supplement for CHAD and the risk factors contained or incorporated by reference therein, available through the SEC’s EDGAR database, for additional information regarding DFDV and the risks associated with an investment in its securities.