dHEDGE continues to innovate, pushing the boundaries of decentralized finance with new releases.

This quarter marks our most successful one this year. Let’s look at the results.

Financials

The following are the financial updates for Q3.

TVL and Revenue

dHEDGE ended Q3 with a Total Value Locked (TVL) of $50M:

• $17M from Toros
• $24M from dHEDGE vaults (excluding Toros)
• $6M from Flat Money V1, V2, and Options V1
• $3M from legacy mStable products

Because we have not done quarterly reporting up to this point, we will include revenue for Q3 and each of the previous quarters from app revenue:

• Q3: $577,577
• Q2: $232,439
• Q1: $220,133

In Q3, Toros accounted for 70% of the total dHEDGE revenue, at $407k. Yield from treasury at 25% with ~$144k. And protocol fees from 3rd party managers at 5% of the revenue.

Q3 was an explosive quarter for revenue, which was greater than Q1 and Q2 combined.

So far this year, dHEDGE has generated $886k in revenue from fees alone. Projections based on this quarter has dHEDGE poised to generate $2.3M in revenue this next year.

Treasury and Runway

As of the start of October, the treasury stands at $8M in liquid assets.

Assuming $1.5M in annual expenditures and no revenue, the lower end of our runway would be just over 5 years.

However, based on the past 30 days, projected annual revenue is $1.15M from Toros and protocol fees. A portion of the treasury is also earning yield, with projected earnings of $570k for the next year. When considering this yield, our total projected income is $1.72M, surpassing our annual expenditures of $1.5M and making our runway effectively unlimited.

Given our strong revenue and runway, dHEDGE is looking into adding a marketing budget to further expand Toros, our main source of revenue.

Additionally, DHT buybacks have been ongoing and will continue.

DHT Market Value

Statistics on the DHT token:

• DHT Q3 close: $8.14M market cap
• Treasury value (excluding DHT): $8M
• dHEDGE annualized revenue (based on Q3): $2.3M
• DHT Market Cap / Annualized Revenue (P/S): 3.54

The DHT market cap at the close of Q3 ($8.14M) is higher than the treasury value ($8M) indicating the market is now valuing the treasury behind DHT.

However treasury alone should not be considered without revenue. Another important metric for assessing valuation is the Price-to-Sales (P/S) ratio, which compares the market cap to revenue.

For a DeFi project like dHEDGE, a P/S ratio below the 5-10 range is often considered undervalued, while a P/S ratio of 10-20 is common for established DeFi projects with steady TVL.

Innovation Updates

Flat Money Everlasting Options

This quarter, Flat Money had a private release for its options protocol.

Flat Money introduced everlasting options—a new market category of options that never expire. What's novel about these options is that not only do they not expire, but they can be used in constant leveraged products like leveraged tokens.

Currently, only Toros has access to them. Toros has maxed out capacity for its options-based leveraged tokens. It's their most innovative product, outperforming a buy-and-hold BTC strategy since inception and over several shorter time frames.

Based on this demand, we will have Flat Money open capacity for LP options immediately following the mStable reboot.

Toros Protected Leveraged Tokens

As mentioned, Flat Money created everlasting options for Toros. Toros has built new leveraged tokens using these everlasting options called "protected leveraged tokens."

Protected leveraged tokens have the payoff of a continuously updating married-put options strategy. In practice, this means they have protected downside exposure. If Bitcoin falls below the strike price, protected leveraged token holders no longer experience any loss in capital value. Conversely, when the price is above the strike, the 2x and 3x versions multiply Bitcoin's price movement, growing exponentially (to the power of two for the 2x token and to the power of three for the 3x token).

These are revolutionary new products for leverage, mitigating the dangers of traditional leveraged tokens while retaining their key benefits: exponential upside, capped downside, and the elimination of volatility decay.

These elements combined are what make these vaults so high in demand. Every leverage multiplier (1x, 2x, and 3x) has outperformed a buy-and-hold Bitcoin strategy. Each time the capacity caps are raised, they are quickly met. Demand is high.

Toros Leveraged Token Expansion

Throughout Q3, Toros expanded its leveraged token offerings on Arbitrum and Ethereum mainnet.

On Ethereum mainnet, the following tokens have been launched:

• ETH: 2x/3x
• BTC: 2x/3x
• Gold: 2x/3x

Ethereum hosts the new gold leveraged tokens, the first real-world asset leveraged token on Toros. The demand for gold on mainnet has kept pace with the demand for ETH and BTC. Gold has had an incredible rally, and we are seeing those in the crypto space start to take notice. We have made accessing leveraged gold easy.

On Arbitrum, the following tokens launched in Q3:

• BNB: 1x
• XRP: 2x
• LINK: 1x/2x
• HYPE: 1x/2x
• PUMP: 1x/2x
• CRV: 1x

mStable Reboot Started

mStable will be rebooted in Q4. Teasers began this quarter.

mStable will be using dHEDGE contracts to build on Pendle. We hope mStable becomes for Pendle what Convex became for Curve. Each mStable product will make earning on Pendle easier. Rollovers will be done automatically, and the products will also feature leverage. Yields will be leveraged, turning deep, safe yields into high-yield opportunities.

dHEDGE Chamber Rebrand Will Expand To DeFi Perps

As part of the mStable focus on yield, the dHEDGE rebrand to Chamber will include a new offering: a lending market built from the ground up that will enable a new age of leverage, which we call "DeFi Perps."

By DeFi Perps we don’t mean perps onchain. We mean, transforming anything in DeFi into a perp. If something has a token, it can be leveraged. sUSDe on Pendle? Both the PT and the YT can now be a perp.

Initially, we may see new mStable markets use this new lending market.

dHEDGE is targeting the rebrand for Q4, so expect it this year.