Solana treasury firm DeFi Development Corp disclosed $112.5 million private placement deal to fund SOL purchases

Solana treasury firm DeFi Development Corp. (ticker DFDV) has disclosed the details of its $112.5 million private placement funding operation to purchase SOL tokens, including a financial arrangement called a "prepaid forward" that will offer investors a way to hedge their risk.

According to an announcement on Wednesday, the firm has secured an aggregate principal amount of $112.5 million offering convertible notes — worth approximately $132.2 million if the initial purchasers exercise their full options — which is expected to close on July 7.

The notes carry an interest rate of 5.5% per annum, payable semi-annually, and will mature in 2030. The notes will also feature a 10% conversion premium to the $21.01 closing price on July 1, 2025.

DDC is one of the leading publicly traded firms pursuing an aggressive Solana purchasing program, following in the footsteps of SOL Strategies, which rebranded in 2024. The firm, previously known as the real estate tech firm Janover, also stakes SOL for itself and others, offering a revenue line not unlike Bitcoin mining.

Parker White, chief investment and operating officer of DeFi Dev Corp, recently told The Block’s MK Manoylov that its staking operations could continue the firm’s SOL acquisitions even without raising “another dime of capital.”

DDC rebranded in April after being acquired by former Kraken executives. The firm raised an initial $42 million financing round to acquire its first tranche of SOL tokens. It has also moved into validating projects like Solana-based Dogwithat .

'Prepaid forward'

Convertible notes are a type of short-term debt used by startups that can convert into equity, typically at a discount, during a future financing round. The financial strategy allows investors to fund early-stage companies while deferring valuation until the company matures. Strategy, the firm chaired by Bitcoin influencer Michael Saylor, pioneered the use of convertible notes and other financial instruments to fund his firm’s BTC treasury purchases, like the recently enacted “42/42” plan using debt and equity sales.

As part of DDC’s funding agreement with unnamed investors, the firm will use approximately $75.6 million of the net proceeds to fund a "prepaid forward" stock purchase transaction. The remaining funds will go toward “general corporate purposes, including the acquisition of SOL.” In June, the firm secured a $5 billion line of credit.

“The prepaid forward is expected to allow the investors to establish short positions that generally correspond to (but may be greater than) commercially reasonable initial hedges of their investment in the Convertible Notes,” the firm noted in a release. In other words, it enables the financiers the ability to hedge some of their investment risk by purchasing or selling shares of common stock the day the DDC prices its notes.

DFDV is trading down 9.52% as of press time at around $19.01. The firm held 621,313 SOL, valued at approximately $107 million, at last count at the end of May.