Buy, hold and store isn’t enough for DATs, says CTO at SOL Strategies

Dats:- If there’s one model that one day promised to connect traditional finance and cryptocurrencies, it’s the digital asset treasury, or DAT.

But in today’s market, that model is starting to crack.

recently Data from Artemis Analytics It shows that the majority of digital asset treasuries are currently experiencing unrealized losses, with only a handful showing gains. In some cases, withdrawals are extreme and amount to millions and billions. Companies like Bitmine Immersion Technologies alone are facing losses of more than $6.6 billion.

“Consolidation in the DAT space is no longer possible, it is inevitable,” according to Max Kaplan, CTO at SOL Strategies.

Many DATs are very similar and do not offer a 10x improvement over ETFs. Today TradFi is used for ETFs and it is natural that ETFs are used by default. “DATs take some time for a traditional investor to understand, and while they have an upside, they also have a downside that the average retail investor doesn’t typically understand,” Kaplan points out.

Read also: Case study of Bitmine’s Ethereum staking

Why staking is no longer optional

This is also why staking has become a staple of enterprise crypto products. Many DATs are now increasingly acquiring their properties to generate additional revenue.

“If you don’t store an asset on a proof-of-stake network, your volume will be diluted as stakers and validators get inflation rewards,” Kaplan says.

Even within staking itself, trade-offs remain.

“Original staking is often viewed as a risk-free rate,” Kaplan explains. “But it comes with lock-ins. Liquid storage removes that, but introduces smart contract risks.”

The system has not become simpler, it has become more accurate. For investors, this means choice, not certainty.

Read also: Coinbase x402 developers on trading agency

Basic transformation of DAT++

To explain how DATs have evolved, Max shares his DAT example, SOL Strategies. The transition from DAT to DAT++ did not happen overnight, but rather occurred in stages, shaped as much by market pressure as by strategy.

to Sol StrategiesThe early model was clear. Like most DATs in 2022-2023, the focus was on accumulating and retaining SOL. As Solana DAT’s flagship, it was particularly reliant on balance sheet exposure to upside. But as market conditions tightened, this model began to show cracks throughout the industry.

By 2023-2024, the transformation has begun. The company began building out its validator infrastructure and expanding its staking operations, including integrating validator businesses like Orangefin Ventures. This marked a move from passive possession to active participation in the network.

like Max Kaplan He puts it:

“I view it as less of a transitional phase and more of an execution of our original strategy. From the beginning, the goal was never to just operate the business as a passive digital asset treasury, but to build true infrastructure within the Solana ecosystem.

Operationally, we are one of the largest staking providers on Solana, and we want to continue to improve and grow. We have redoubled our efforts to improve our product versus trying to play financial engineering games to be at least better than ETFs at best. We are now an equity provider for VanEck’s ETF and are thrilled to support such great partners.

In fact, today’s SOL Strategies model has evolved into DAT++, a combination of treasury, infrastructure and revenue generation. This is something that other DATs like Bitmine via MAVAN appear to be exploring as well.

The timing of this shift coincides with broader market signals. Data from Artemis Analytics It shows that most DATs are now trading at 1x NAV or less. This comes despite treasury ownership remaining relatively limited, with DATs only holding a small share of the total circulating supply of less than 10% across major assets.

In that environment, the old model of holding assets and hoping for a valuation premium lost its edge.

Read also: VARA advisor on the next phase of digital finance

Hidden deficiencies in infrastructure

But even in the area of ​​infrastructure, shortcomings remain.

Caliban believes that the auditor’s behavior has not been fully adapted.

“Validators are late in optimizing their revenue. The longer they wait to produce a block, the more transactions they have to choose from to put in the next block. If a validator builds a block as quickly as possible and there is a transaction that comes with high fees right after their block is created, the high fees go to the validator after them, and that’s a lost revenue opportunity.”

At SOL Strategies, we don’t do any of this because it ultimately hurts Solana. Auditors who do this spend very little money, and are wasting the forest for the trees. The real revenue opportunity is to increase prices in SOL, and the way we get there is to be Solana as quickly as possible. SOL Strategies will always remain dedicated to this mission.