DeFi Development CHAD dividend rises to 14%

DeFi Development CHAD dividend rises to 14% to grow Solana treasury

DeFi Development Corp. will raise its CHAD preferred dividend to 14% from 13% on Nov. 2, the Solana treasury firm said in an Oct. 15 SEC filing.

The DeFi Development CHAD dividend is going up. DeFi Development Corp. (Nasdaq: DFDV) said on Oct. 15 that it will raise the annual rate on its CHAD preferred stock to 14% from 13%, starting Nov. 2. The rate change is new since the firm’s last update on its Solana ($SOL) holdings.

The quick take

Price: $SOL $105.95, +1.2% ↑ in 24 hours (CoinGecko, 21:40 UTC)
Trigger: CHAD will pay $1.40 a year per $10 share, up from $1.30
Watch: Whether new CHAD sales turn into more $SOL for the treasury

What happened

CHAD is the name for the Variable Rate Series C Perpetual Preferred Stock of DeFi Development. The rate rises by 100 basis points on its $10 stated amount. The company says that works out to about 7.7% more dividend income per share.

Dividends are cumulative. They are paid each business day, but only when the board declares them. The details come from a press release the company filed with the SEC as an exhibit to a Form 8-K.

Why it moved

The company said the increase reflects how it manages CHAD’s variable rate. It weighs market conditions, investor demand and its own cost of capital.

“CHAD’s proposition is compelling: double-digit dividend income, paid every business day,” said Joseph Onorati, the company’s chief executive.

Who’s buying and selling

DeFi Development is a public company that holds $SOL as its main treasury asset. It added about 22,070 SOL and SOL equivalents last week, The Block reported. That brought its total to about 2.59 million SOL.

At CoinGecko’s price of $105.95 at 21:40 UTC, that holding is worth about $274 million. The company says it earns returns on it through staking and its own validators.

The firm plans to use money from future CHAD sales to buy more $SOL. The Block also noted that CHAD hit record trading highs this week. The company recently approved a program to buy back up to all outstanding CHAD shares.

What to watch next

The new rate takes effect on Nov. 2. A higher payout raises the cost of this funding, so the test is whether new CHAD sales bring in more $SOL. $SOL itself rose 1.2% over 24 hours, per CoinGecko.

Bottom line: DeFi Development is paying investors more to raise money through CHAD, with the goal of growing its Solana treasury.

Price data: CoinGecko.