Mega Matrix, a publicly traded holding firm that has shifted into digital belongings, filed a $2 billion shelf registration with the US Securities and Alternate Fee (SEC) to fund a stablecoin-focused treasury technique, underscoring how extra corporations are experimenting with digital asset reserves.
The funding is aimed on the Ethena stablecoin ecosystem, with proceeds directed towards accumulating the protocol’s ENA (ENA) governance token. Mega Matrix stated the transfer is designed to offer the corporate publicity to income generated by Ethena’s artificial stablecoin, USDe, whereas additionally securing affect over the protocol’s governance.
In SEC phrases, a shelf registration is a regulatory submitting that lets an organization register securities for future issuance, permitting it to promote parts of its inventory over time relatively than .
In its announcement, the corporate emphasised that the technique is concentrated “completely on ENA, concentrating affect and yield in a single digital asset.”
Quite than holding USDe instantly, Mega Matrix plans to construct a big place in ENA, which may gain advantage from Ethena’s “fee-switch” mechanism — an onchain characteristic that, as soon as activated, distributes a share of protocol revenues to ENA holders.
The corporate pointed to the speedy progress of Circle, a number one stablecoin issuer, and the rise of digital asset treasury methods as drivers of its Ethena-focused plan.
It additionally cited the US GENIUS Act, which prohibits issuers from paying yield on to stablecoin holders. Mockingly, the restriction has fueled demand for artificial, yield-bearing alternate options similar to Ethena’s USDe.
“Exactly as a result of the GENIUS act banned issuers from offering yield on to holders, buyers are turning to yield-bearing stablecoins or staked stablecoins to get yield,” CryptoQuant’s head of analysis, Julio Moreno, advised Cointelegraph.
Ethena’s mannequin differs from conventional fiat-backed stablecoins like USDC (USDC) or USDt (USDT). USDe is an artificial stablecoin designed to take care of its greenback peg utilizing a mixture of collateral hedged with perpetual futures contracts. This construction permits the protocol to generate yield from funding charges in derivatives markets.
Though nonetheless smaller than its collateralized rivals, Ethena’s progress has been hanging. In August, developer Ethena Labs reported that the protocol’s cumulative gross curiosity income had surpassed $500 million.
USDe has since climbed to change into the world’s third-largest stablecoin, with a market capitalization of $12.5 billion, in accordance with CoinMarketCap.
Associated: Financial institution foyer is ‘panicking’ about yield-bearing stablecoins — NYU professor
Digital asset treasury corporations are gaining traction
Mega Matrix’s $2 billion shelf registration stands out as unusually giant for an organization of its measurement. The corporate at the moment has a market capitalization of about $113 million, with first-quarter income slipping to $7.74 million and web losses widening to $2.48 million. Its core enterprise stays FlexTV, a short-form streaming platform.
Its flip towards digital asset treasury methods shouldn’t be solely sudden, coming simply months after the corporate spent $1.27 million to buy Bitcoin (BTC) in June.
Even so, Mega Matrix shouldn’t be alone in seeking to digital belongings as a balance-sheet technique. Many smaller corporations have both added cryptocurrencies to their treasuries or pivoted solely towards digital asset holdings.
One latest instance is ETHZilla, a former biotechnology firm that has gathered a whole bunch of tens of millions of {dollars}’ price of Ether (ETH) via a mixture of funding methods. Different corporations pursuing related paths embrace BitMine Immersion Applied sciences, SharpLink Gaming, and Bit Digital.
Regardless of their progress, digital asset treasury methods carry important dangers, in accordance with Josip Rupena, CEO of lending agency Milo. Talking with Cointelegraph, Rupena in contrast the mannequin to collateralized debt obligations — the complicated monetary merchandise that performed a central position within the 2008 monetary disaster.
“There’s this side the place individuals take what’s a reasonably sound product, a mortgage again within the day or Bitcoin and different digital belongings in the present day, for instance, and so they begin to engineer them, taking them down a route the place the investor is not sure in regards to the publicity they’re getting,” he stated.
Associated: Yield-chasing ETH treasury corporations are most in danger: Sharplink Gaming CEO