Want pure-play Solana? DATs not the answer
Sep 29, 2025

Want pure-play Solana? DATs not the answer

Want pure-play Solana? DATs not the answer Want pure-play Solana? DATs not the answer Video Thumbnail

Digital Asset Treasuries (DATs) are publicly traded companies that acquire crypto on their balance sheets as their primary corporate strategy. The approach first gained prominence with Bitcoin-focused firms like MicroStrategy (now Strategy) but has since expanded to other digital assets, including Ethereum and Solana. While these vehicles can trade at meaningful premiums relative to the value of the tokens they hold, they can also trade at a discount. Their popularity comes from offering investors exposure to digital assets through a familiar equity structure that can be bought in a brokerage account.

Over the past year, a handful of companies have adopted this approach by adding Solana to their treasuries. Forward Industries, Sol Strategies, Upexi, and Sharps Technology have all positioned themselves as Solana DATs, attracting attention from investors seeking equity-based exposure to the token.

Both Solana DATs and ETFs give investors exposure to the token, but the way they track the underlying value differs sharply. Solana ETFs are designed to trade in line with their net asset value (NAV), supported by an arbitrage mechanism that keeps prices close to the fair value of the SOL they hold. DATs, on the other hand, lack this structural safeguard. As a result, their share prices can drift significantly from NAV, often trading at persistent premiums or discounts relative to their Solana holdings. While this highlights one of the clearest distinctions between the two structures, it also underscores a broader point: DATs and ETFs each carry their own advantages, and understanding the trade-offs requires a closer look at the specific risks tied to DATs.

What are the risks?

  1. Valuation

A key challenge with Solana DATs is that they rarely trade in line with the underlying value of their Solana holdings. Instead, stocks like Forward Industries or Sol Strategies can trade at sizable premiums or discounts to their net asset value (NAV). For instance, Forward Industries holds approximately $1.5 billion of SOL yet trades at a market cap of $2.57 billion. While many DATs stake nearly all of their Solana and can generate an additional 3–6% yield by participating in Solana’s DeFi ecosystem, this incremental return often fails to offset the valuation gaps created by persistent premiums - or, in some cases, steep discounts such as those seen with Sharps Technology.

  1. Operational

Beyond valuation, DATs carry considerations that extend beyond Solana exposure. These vehicles are not pure-play crypto products but repurposed small companies, often with legacy businesses in areas like medical devices, consumer products, or IT services, layered on top of a Solana treasury. In some situations particularly where the DAT structure was formed through a reverse merger; companies like Forward Industries have begun selling or winding down those legacy operations, while others continue to run them alongside their crypto holdings. For an investor seeking pure Solana exposure, this means taking on additional, and often unwanted, exposure to unrelated business lines. By contrast, an ETF avoids this issue: investors in a Solana ETF receive exposure only to the underlying asset, without the added complexity of a company’s non-crypto operations.

Because DATs are created by taking over existing listed companies, they also inherit any outstanding obligations of the predecessor entity. Unresolved debt or pending litigation, for instance, could leave shareholders exposed to unrelated liabilities, such as having to satisfy a multimillion-dollar legal judgment. DATs also incur ongoing operating expenses, including custody, trading spreads, and costs tied to legacy operations, further eroding potential returns. While ETFs face certain compliance costs as well, those borne by DATs tend to be more burdensome - covering not only SEC reporting, annual audits, and Sarbanes-Oxley compliance, but also the overhead of maintaining legacy businesses. In theory, these heavier costs should justify DATs trading slightly below NAV to reflect the drag on returns - leaving investors with less exposure to the underlying than intended.

  1. Transparency 

With DATs, investors often have limited visibility to what is going on under the hood. These vehicles can alter their exposure or dilute shareholders by issuing new shares, sometimes through at-the-market (ATM) offerings. Many are structured as operating companies rather than investment companies, meaning they can tap an ATM program once they’ve filed a shelf registration (Form S-3) with the SEC - shareholder approval is not typically required unless the issuance triggers exchange rules such as Nasdaq’s “20% rule.” By contrast, ETFs are designed as regulated investment vehicles. Their holdings and permissible activities are spelled out in fact sheets, prospectuses, and daily holdings disclosures, giving investors a clear view of how exposure is managed. The prospectus is legally binding and details exactly what an ETF can and cannot do in terms of asset classes, leverage, and derivatives usage, ensuring that investors understand the boundaries from the outset.

In contrast, DATs do not operate under a standardized prospectus requirement - beyond general securities and fraud laws, there are no clear, enforceable guidelines that define how they may structure, disclose, or limit their exposures - DATs typically report their crypto holdings only in quarterly filings, whereas ETFs provide holdings disclosure on a daily basis, offering investors far more frequent visibility. An example of this lack of transparency occurred when Bitmine Immersion Technologies Inc. (BMNR) used some of its ETH holdings to participate in a PIPE financing for Eightco Holdings Inc. (ORBS), a Worldcoin (WLD) DAT, with the public only becoming aware once ORBS itself made the announcement.

The DAT advantage

Despite their drawbacks, DATs do have certain features that can appeal to investors:

  • Higher staking yields - Many Solana DATs stake nearly all of their Solana holdings, capturing the full staking reward and sometimes boosting returns further by participating in Solana’s DeFi ecosystem. This can generate incremental returns above the 3–6% typically available through staking alone.

  • Financial engineering opportunities - Some Solana DATs can enhance value per share through strategies by tapping into capital markets and issuing bonds or borrowing at low interest rates and seeking to outperform those costs with Solana appreciation or yield-generating activities. Others may benefit from a flywheel effect: as Solana’s price rises, a DAT can issue new shares and use the proceeds to purchase more Solana, which in turn increases its total holdings and may put further upward pressure on Solana’s price - repeating the cycle.

  • Buying locked tokens at a discount - In some cases, Solana DATs can acquire Solana through private deals or token allocations that are locked for a period of time, allowing them to purchase at a discount relative to the spot market. If Solana appreciates, these positions can enhance per-share value once unlocked.

  • Equity market accessibility - Solana DATs trade as listed equities, which may benefit investors who prefer stock ownership, lack access to spot crypto markets, or want exposure via brokerage accounts in markets where spot crypto ETFs/ETPs are not available.

  • Potential corporate upside - In addition to Solana exposure, some investors may see value in the broader business strategies these companies pursue, viewing them as an additional source of optionality.

The ETF advantage

By contrast, a regulated ETF offers cleaner, more efficient exposure:

  • Direct exposure - A Solana ETF is backed 1:1 by the underlying asset, eliminating operational risks and ensuring investors pay only for Solana exposure, not for the uncertain performance of a legacy business.

  • Tight NAV tracking - ETFs trade in line with their net asset value (NAV) thanks to an arbitrage mechanism that keeps prices close to the fair value of their Solana holdings - unlike DATs, where premiums and discounts can persist for months.

  • Investor safeguards - ETFs come with regulated custody, clear reporting, and institutional-grade oversight. These protections enhance transparency and reduce operational uncertainty, features that small-cap DATs typically lack.
  • Lower Costs: ETFs typically carry low management fees relative to the implicit costs embedded in DATs (executive comp, corporate overhead, stock issuance). Investors aren’t subsidizing a corporate structure unrelated to Solana.
  • Scalability: ETFs can grow or shrink efficiently through creation/redemption. DATs scaling can sometimes require dilutive share issuance, which may not benefit existing investors.

Bottom line

Both DATs and ETFs offer investors pathways to gain exposure to Solana, each with its own set of benefits. DATs may provide higher yield opportunities and appeal to equity-focused investors, but their structures can introduce complexity, valuation gaps, and added risks. ETFs, meanwhile, prioritize efficiency, transparency, and tight NAV tracking, albeit often with more limited yield potential. For investors, the choice ultimately comes down to whether they value yield and equity-style flexibility, or prefer the pure exposure, simplicity, and safeguards of a regulated ETF.

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