Mega Matrix, a publicly traded holding firm that has shifted into digital property, filed a $2 billion shelf registration with the US Securities and Alternate Fee (SEC) to fund a stablecoin-focused treasury technique, underscoring how extra companies 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 mentioned the transfer is designed to present 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 quite than all of sudden.
In its announcement, the corporate emphasised that the technique is concentrated “completely on ENA, concentrating affect and yield in a single digital asset.”
Somewhat than holding USDe straight, Mega Matrix plans to construct a major place in ENA, which may gain advantage from Ethena’s “fee-switch” mechanism — an onchain function that, as soon as activated, distributes a share of protocol revenues to ENA holders.
The corporate pointed to the fast development 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. Satirically, the restriction has fueled demand for artificial, yield-bearing options corresponding 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 development 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 turn out to be 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 firms are gaining traction
Mega Matrix’s $2 billion shelf registration stands out as unusually massive for an organization of its measurement. The corporate at present 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 is just not fully surprising, coming simply months after the corporate spent $1.27 million to buy Bitcoin (BTC) in June.
Even so, Mega Matrix is just not alone in trying to digital property as a balance-sheet technique. Many smaller companies have both added cryptocurrencies to their treasuries or pivoted fully towards digital asset holdings.
One current instance is ETHZilla, a former biotechnology firm that has collected a whole bunch of thousands and thousands of {dollars}’ price of Ether (ETH) by way of a mixture of funding methods. Different firms pursuing comparable paths embody BitMine Immersion Applied sciences, SharpLink Gaming, and Bit Digital.
Regardless of their development, 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 advanced monetary merchandise that performed a central function within the 2008 monetary disaster.
“There’s this facet the place individuals take what’s a fairly sound product, a mortgage again within the day or Bitcoin and different digital property at this time, 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 mentioned.
Associated: Yield-chasing ETH treasury companies are most in danger: Sharplink Gaming CEO
