DeFi Technologies Inc.

DeFi Technologies is a Canadian fintech company dedicated to building a bridge between traditional capital markets and decentralized finance (DeFi). Its business covers several key areas: Cryptocurrency Asset Trading and Investment: Conduct low-risk arbitrage trading through the professional trading platform DeFi Alpha. By the beginning of the third quarter of 2024, the platform has achieved $14.1 million in "low-risk arbitrage trading," which includes $2.9 million in Tether (USDT) and $11.2 million in "digital asset inventory." At the same time, the company has adopted Bitcoin as its primary treasury reserve asset, purchasing 110 Bitcoins for $7.6 million in June 2024, with plans for further accumulation. It has also ventured into altcoin investments, such as acquiring 12,775 SOL tokens and 1,484,148 CORE tokens. Asset Management and ETP Services: The subsidiary Valour under its management is making strides in the European market, offering dozens of cryptocurrency exchange-traded products (ETPs). Due to the relatively relaxed regulatory environment in Europe, Valour is able to launch ETP services covering various crypto assets such as Solana (SOL), Cardano (ADA), and Near (NEAR) in regions outside of North America. Additionally, the company creates higher returns for users by collateralizing tokens in relevant funds. Strategic Acquisition and Resource Integration: In January 2024, DeFi Technologies acquired the market research business Reflexivity Research from renowned cryptocurrency market analyst Will Clemente. By integrating professional resources, it enhances its capabilities in market analysis, investment strategy formulation, and provides stronger support for the company's business decisions.

Trading Profit: Utilizing the DeFi Alpha platform, leveraging a professional trading team and advanced trading strategies to capture price fluctuations in the cryptocurrency market for arbitrage trading. For example, based on technical analysis indicators such as the Relative Strength Index (RSI) to assess market overbought and oversold conditions, confirming market trends through increased trading volume, and using Exponential Moving Average (EMA) crossovers to seize buying and selling opportunities, buying at price lows and selling at highs to achieve low-risk arbitrage, bringing direct trading profits to the company. Asset appreciation profit: The company's investments in cryptocurrencies such as Bitcoin, SOL, CORE, etc., are expected to increase in value as market demand for these assets grows, the development of the projects behind them progresses, and the overall market conditions improve. When the asset appreciation reaches the expected target, profits can be obtained by selling a portion of the assets. For example, if the price of Bitcoin rises due to increased market demand, the company can realize profits by selling a portion of its Bitcoin. ETP Business Profit: The cryptocurrency ETP services provided by Valour generate income by charging investors a certain percentage of management fees. At the same time, additional revenue is obtained by staking tokens in the fund, such as in the Bitcoin and Solana ETPs, utilizing core network staking of BTC and other methods to create higher profits per deposit than the U.S. Bitcoin ETF.

Exploring New Investment Paths: For traditional investors, DeFi Technologies offers new channels to participate in cryptocurrency market investments. In the past, individual investors faced numerous barriers when directly engaging in complex cryptocurrency trading, such as technical knowledge and risk management. The company's professional trading and asset management services allow investors to indirectly participate in the cryptocurrency market by purchasing company stocks or participating in its ETP products, enriching their investment options. Promoting Industry Maturity: The company's professional trading strategies, risk management systems, and compliant asset management operations set a standard for regulated practices in the cryptocurrency market. By reasonably applying technical analysis in trading and strictly controlling risks, while adhering to regulatory requirements in asset management, it helps reduce blind speculation in the market and guides the cryptocurrency market towards a more rational and mature direction. Promoting the Integration of Financial Innovation: DeFi Technologies combines traditional financial asset management models with the emerging cryptocurrency market to develop innovative financial products such as cryptocurrency ETPs. This integration not only injects stability from traditional finance into the cryptocurrency market but also brings new vitality and investment opportunities to the traditional financial market, driving innovation and development in the financial industry. Enhancing Shareholder Value: Through successful trading profits, asset appreciation, and the good operation of the ETP business, the company can achieve revenue growth and profit enhancement, thereby increasing the company's market value. This directly brings economic returns to shareholders, who can share in the company's development dividends through rising stock prices, dividends, and other means, increasing the value of their investment portfolios.

Bitcoin (BTC): The company has adopted Bitcoin as its primary treasury reserve asset, and the ongoing buying behavior has directly increased market demand for Bitcoin, driving up its price. For example, after announcing Bitcoin as its main reserve asset, its stock price soared, which also attracted more investors' attention to Bitcoin, further enhancing its market popularity and price. Solana (SOL), Cardano (ADA), Near (NEAR), etc.: Valour has launched ETP services in the European market that include these crypto assets, making it easier for more investors to invest in these assets and expanding their market audience. As investor demand increases, the market liquidity of these cryptocurrencies strengthens, and prices may rise due to demand-driven factors. Stablecoins such as Tether (USDT): The arbitrage trading on the DeFi Alpha platform involves stablecoins, with a transaction in early Q3 2024 including $2.9 million in USDT. The company's use of stablecoins in trading affects the circulation speed and trading volume of stablecoins in the market, to some extent maintaining the market balance between stablecoins and other cryptocurrency trading pairs, while also bringing more liquidity to the stablecoin market through trading.