Mega Matrix, a publicly traded holding firm that has shifted into digital property, filed a $2 billion shelf registration with the US Securities and Exchange Commission (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 stated 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 relatively than .
In its announcement, the corporate emphasised that the technique is concentrated “solely on ENA, concentrating affect and yield in a single digital asset.”
Rather than holding USDe instantly, 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 firm pointed to the fast 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. Ironically, the restriction has fueled demand for artificial, yield-bearing alternate options comparable to Ethena’s USDe.
“Precisely 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, instructed Cointelegraph.
Ethena’s mannequin differs from conventional fiat-backed stablecoins like USDC (USDC) or USDt (USDT). USDe is an artificial stablecoin designed to keep up 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.
Although nonetheless smaller than its collateralized rivals, Ethena’s progress has been putting. In August, developer Ethena Labs reported that the protocol’s cumulative gross curiosity income had surpassed $500 million.
USDe has since climbed to grow to be the world’s third-largest stablecoin, with a market capitalization of $12.5 billion, based on CoinMarketCap.
Related: Bank 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 massive for an organization of its dimension. The firm at the moment has a market capitalization of about $113 million, with first-quarter income slipping to $7.74 million and internet 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 fully 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 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 lots of of tens of millions of {dollars}’ price of Ether (ETH) by way of a mixture of funding methods. Other corporations pursuing related paths embrace BitMine Immersion Technologies, SharpLink Gaming, and Bit Digital.
Despite their progress, digital asset treasury methods carry vital dangers, based on Josip Rupena, CEO of lending agency Milo. Speaking with Cointelegraph, Rupena in contrast the mannequin to collateralized debt obligations — the advanced monetary merchandise that performed a central position within the 2008 monetary disaster.
“There’s this side the place individuals take what’s a fairly sound product, a mortgage again within the day or Bitcoin and different digital property right this moment, for instance, and so they begin to engineer them, taking them down a path the place the investor is uncertain in regards to the publicity they’re getting,” he stated.
Related: Yield-chasing ETH treasury companies are most in danger: Sharplink Gaming CEO
