Joseph Onorati's DFDV: Building a $300M+ Solana DAT

Joseph Onorati has spent over a decade at the frontlines of crypto adoption. He built Canada's first Bitcoin exchange in 2013, spent 8.5 years at Kraken watching it scale from 23 employees to over 2,000, and lived through multiple regulatory crackdowns including Choke Point 2.0. Now, as founder and CEO of DeFi Development Corp (DFDV), he's building something the market has never seen before: a U.S.-listed company with approximately 2.2 million SOL (worth around $304 million at current prices), deployed entirely on-chain.

The First Non-Bitcoin Digital Asset Treasury

In April 2024, DFDV made a calculated bet that surprised many. The company could have followed MicroStrategy's playbook with Bitcoin or chosen the safer institutional option of Ethereum. Instead, it became the first non-Bitcoin Digital Asset Treasury in U.S. public markets, going all-in on Solana.

The decision came from personal conviction. Both Joseph and COO Parker White had been active in Solana DeFi since mid-2021, with White running Solana validators for two years prior.

"I remember the first time I used Solana and I said, whoa, this is like consumer-grade crypto here. This is a really smooth experience compared to coming from Bitcoin and Ethereum Layer 1 back then. I thought that speed will enable financial applications that are impossible to do on other blockchains."

But DFDV isn't just holding SOL in custody. Unlike MicroStrategy's passive Bitcoin strategy, every asset is deployed on-chain through validators, generating yield that traditional treasury companies can't match.

The 11.4% Yield Strategy

Here's where DFDV diverges sharply from the MicroStrategy model. In Q3 2024, the company generated an annualized organic balance sheet yield of 11.4%, which Joseph claims is the highest yield any DAT has ever earned in a quarter.

The strategy has multiple layers. DFDV runs its own high-performance Solana validators and delegates exclusively to them, capturing all block rewards. The company also created DFDV Sol, a liquid staking token minted through Sanctum that has become one of the largest collateral assets on Solana. When third parties mint DFDV Sol, the company generates additional Sol-denominated revenue.

Then there's the stake looping strategy. DFDV borrows SOL below staking returns and levers up with minimal risk. Because these are Sol-on-Sol loans, the company can't get liquidated from price drops since DFDV Sol and Sol move together. Some lending markets even peg LST prices to the unstaked Sol price, eliminating liquidation risk from liquidity fluctuations.

"We keep our validators in-house and delegate to our own validators. That gets us all of the block rewards. Then we have a liquid staking token, DFDV Sol. Whenever a third party mints DFDV Sol, we generate additional revenue denominated in Sol that flows through to Sol-per-share."

Sophisticated Capital Markets Playbook

DFDV has deployed nearly every institutional financing instrument available. The company raised $42 million in convertible debt led by Pantera and Kraken, assembled a PIPE equity round with Cantor, and issued 144A convertible debt using the same structure MicroStrategy pioneered. Currently, DFDV has a preferred equity raise in market targeting approximately $65 million, making it the first non-Bitcoin DAT to file an S-1 for preferred stock.

The convertible debt particularly illustrates Joseph's long-term thinking. DFDV raised $125 million at a 5.5% coupon with a five-year duration, unsecured. The bet is straightforward: Will SOL be higher in roughly five years?

"Easy answer: yes," Joseph says. "You can't get access to this kind of capital outside of the DATs. If I want to trade on Hyperliquid, I can't get the five-year unsecured option. That's not a thing."

The company is also exploring variable rate perpetual preferreds, following MicroStrategy's STRC model. These instruments let companies borrow with no duration at around 10% interest. While Solana's higher volatility compared to Bitcoin creates different dynamics, the native yield and on-chain deployment strategies give DFDV tools to service these payments while collecting a net interest margin.

"DATs have to lever up because that's what we're going to have to do to compete with each other and provide value to investors. We have to provide access to leverage Solana or leverage Bitcoin - more upside, more downside. And we have to plan."

The MSCI Challenge and Sound Money Philosophy

Not everything is smooth sailing. MSCI, a major index provider, is considering excluding Digital Asset Treasuries from many funds, arguing they're more like funds than operating companies. The decision could force index funds to sell DAT positions.

Joseph's counterargument centers on DFDV's validator business. "If we were a gold mining business and we had gold on our balance sheet because we were mining it, would that warrant exclusion from an index? I don't think so," he says.

For now, DFDV is too small to be included in most indexes, so the immediate impact is minimal. But Joseph sees it as a "speed bump on this very long road" rather than an existential crisis. His perspective reflects over a decade in crypto, surviving multiple cycles and regulatory crackdowns.

Beyond the financial engineering and validator economics lies a philosophical core rooted in monetary theory. Joseph sees DFDV as infrastructure for a sound monetary system that constrains state power by forcing governments to tax and spend simultaneously rather than spending first and taxing later.

"My priority is mass adoption of a sound monetary system. If we move away from fiat to sound money, we ultimately constrain the power of states globally and can align the wishes of the people with the actions of the state."

This conviction has guided every trade-off: accepting ETF wrappers and institutional structures if they drive adoption, choosing leverage despite risks, deploying on-chain despite custody being simpler.

On price, Joseph remains characteristically patient. He projects $400 SOL in six months, $500 in one year, but the real target is $10,000 per SOL over a decade, predicated on virtually all financial transactions moving on-chain with Solana as the settlement layer. His thesis is built on Solana winning the technology race on decentralization, throughput, and speed.

DFDV currently holds approximately 2.2 million SOL worth around $304 million (at ~$138 per SOL), with the company continuing to expand its treasury through strategic purchases and on-chain yield generation. The model represents a fundamentally different approach to corporate treasury management, one where the balance sheet actively participates in the ecosystem it's betting on.

The institutions have arrived on Solana, and as Joseph realized with some amusement: "DFDV is Wall Street on Solana now. We're a publicly listed company. I'm the institution now."