jakiro
Author: Timothée, DAT research analyst; Translation: Bitchain Vision xiaozou
“I will offer conditions that the other party cannot refuse.” – Alt DAT enters at a discounted mNAV and provides instant unlock terms to PIPE investors
This article is a DAT investment guide (pit avoidance manual) prepared for everyone.
The current DAT market through the fourth quarter will be dominated by Alt DAT, which adopts the PIPE issuance mechanism, because it has the fastest speed to market and can have an instant scale effect on the underlying tokens.The BTC/ETH track is now crowded, the SOL market is about to be fully interpreted, and the altcoin sector is ready to go.
Summary of this article:
Key DAT elements – see the exquisite investment bank benchmarking table.
Additional question-ask yourself: Who is the final owner?
DAT panic and doubts–some are reasonable and most are undata–please study the filing documents yourself!
The fourth quarter outlook – the release feast is over, and the real winner is about to emerge.
Why are Alt DATs deploying in the DAT field?Simply put, it is driven by multiple factors.
New listing path: not Binance, but Nasdaq!
Repurchase and destruction mechanism, but can achieve monetization!
Let’s share the Alt DAT data I have compiled below.
Some Alt SPACs, such as TLGY targeting ENA tokens and ETHM targeting ETH, are targeting online by the end of the year.Although I am personally optimistic about TLGY, its funds need to be used after the deSPAC is completed at the end of the year. It is not reasonable to promote media publicity before this.
Listed companies have added Bitcoin strategy (non-pure gameplay).The premium trading window for such entities (such as SMLR) is from the third quarter of 2024 to the third quarter of 2025; I think these targets will be traded at net asset value in the long run, as investors now have more/better exposure expression options.
Initially, DAT projects that use ELOC (emergency line of credit) instead of PIPE (cannot be in cash immediately).
Key things to pay attention to
RDO stands for instant unlocking.Unregistered shares mean that they need to be unlocked after registration takes effect (expected to 30-45 days), but according to the new Nasdaq regulations, if the PIPE part is completed in physical form, it may now be subject to shareholder vote (specific guidelines to be released).
Pre-financing warrants are often used to avoid exceeding a specific shareholding threshold and thus avoid reporting obligations.
Although warrants are often used as credit enhancement tools, this helps DAT lock in the ability to raise funds at specific prices in the future—for example, when mNAV is switched to a discount.
You can assume that 99% of PIPE investors will sell when unlocked.
Some operators obtain WKSI (famous mature issuer) qualification through large-scale financing and high circulation, so as to immediately launch the ATM (issuance by market price) mechanism and realize the premium (we have seen this model in BMNR and SBET cases, and OCTO is likely to follow).
Structure is crucial: Pay attention to the net asset value per share (NAV) and whether it faces future dilution risks such as warrants.
Pay attention to the specific amount of DAT pays investment bank fees.DATs currently worth less than $100 million often have difficulty starting smoothly due to excessive payments.Investment banks vary from person to person – some are good at brand building and structural design, while others specialize in obtaining shell resources, etc.
Data dimensions/key issues to be added
Key Spokesperson (Reward of Attention):Who has the ability to drive market awareness?Having a distribution channel is important, but whether you can tell the right story is also critical.Not everyone can become Tom Lee (founder of Fundstrat Capital), but grassroots growth does not require such heavyweights.For example, BONK’s DAT project SHOT has core contributor Nom.
Treasury management: The amount of this expenditure and will it cause a drag on cash flow?
Liquidity: The percentage of circulation and transaction volume as fundraising scale.
Buying pressure: The proportion of net new funds raised to the token circulation market value – how much is considered excessive?What is the minimum requirement for substantial impact?10%?20%?
Target company business: Before DAT completely divested its traditional business, does the target party have contingent liabilities or long-tail risks?
Foundation participation: Is this DAT supported by the foundation, or is it one of many similar projects?
Repurchase mechanism: Will this DAT use part of the raised funds for defensive repurchases?Is there another warrant or convertible bond fund pool for this?
Future Strategy: If DAT adopts a one-time cash harvesting strategy for PIPE, you need to be wary of the active communication of the target company or the successor team (or foundation).This is not a crypto-field game, and it will lead to real-world consequences.
Public relations/Investor relations for retail investors: If the DAT puts data indicators before narrative logic, there is a fallacy in its strategy.Please check its tweets, who do you think are the writer and the target audience?Alt DAT first needs to compete at the level of awareness, and the first thing to compete for is retail investors’ attention.
Core doubts and counter-evidence
mNAV is compressing–It is true, and projects that lack competitiveness cannot be the top should be like this.ETH faces this situation due to the overdilution of the ATM mechanism + overall market dynamics.But you need to ask yourself: Do you believe that a certain DAT can achieve value growth per share in a few months (compared to holding spot)?If so, then discounting mNAV is your opportunity.DATThere are natural differences in projects——The BTC/ETH/SOL track should have one top winner, while the Alt track depends on the ability of each project to tell the story.
This is a Ponzi scheme–We have not seen crazy leverage pouring into these DAT projects (as most of them are raised through equity).Even if it happens, it will not trigger a crazy chain effect, and it is more likely to have a slow stagnation similar to indigestion – inefficient DATs may require selling tokens to buy back shares, which will put downward pressure on token prices.
They are selling to retail investors—You need to believe that Nasdaq has stricter listing standards.Those projects that forcefully inject lock-in tokens will perform poorly.The market has insight into this phenomenon (thanks to you for your contribution!), and I am sure that the price will be determined by the market arbitration mechanism when it is listed.
My opinion on the fourth quarter
The BTC/ETH/SOL track is basically saturated. Unless regional gameplay appears, there should not be expected to influx of too many super competitive new projects.
We will see several foundation-supported TOP50 DAT projects, with the total fundraising amount (including physical investment) expected to remain in the range of US$250 million.
mNAV compression combined with potential restrictions on physical investment means that traditional VCs may no longer participate in such transactions, resulting in funds exhaustion.This will inadvertently lead to a simultaneous decline in shell prices.
Structural design determines success or failure – we will soon witness which DAT projects launched in July and August have long-term success potential (reflected in Q4 performance): Can it gain substantial media attention?Can we continue to operate under the unlocked capital structure?
I’m not very optimistic about the SPAC model – unless I have an all-star team and can tell a highly differentiated story.You can refer to the leading competitive landscape of BMNR in the ETH DAT field. The BTC carrier project will also be similar: if you challenge the King (MSTR), be sure to hit it with one hit.
I still believe that DAT is beneficial to the overall crypto field, provided that it can raise net new capital from the equity market and use it to create a flywheel effect for its own ecosystem.
