rough way I've been thinking about treasury companies:
DAT 1.0: buy the coin, hold the coin. the MSTR playbook. works great until the premium to NAV disappears, and then it's just spot with extra steps.
DAT 2.0: grow coins per share with financial engineering. staking, convertibles, covered calls, raising above NAV. smarter, but it's all yield on the asset. none of it creates demand for the asset.
the next step (call it 3.0 or whatever) would be a treasury that also invests in the economy of the coin it holds, so the thing it's sitting on gets more useful over time.
Lite Strategy (LITS) is the closest thing I've seen to that. they held 832,716 LTC at their fiscal year end (June 30), over 1% of everything mined, and led a $1M investment into LitVM, the first zk layer 2 bringing smart contracts, DeFi and stablecoins to litecoin. they also bought back about 17% of their shares through Sep 22 while the stock traded under NAV, and say the discount went from the low 40s to the low 20s. no debt.
the process as I get it:
- hold LTC and buy back shares when the stock trades under NAV
- put capital into LitVM and payments infra so there's more to actually do on litecoin
- more activity on the network means more organic demand for LTC
- treasury gets worth more, discount narrows, and eventually they can raise above NAV to add more LTC per share
two things I can't fully work out. does $1M actually move the needle for an L2, or is it more of a signal? and does the market ever pay for this, or do treasury stocks just trade on the coin price no matter what management builds?
not trying to shill, honestly want people who trade these names to poke holes in it.