We built ETH Strategy to solve the top issue facing DeFi users today, getting liquidated while being giga-long ETH. While robust liquidation engines are crucial to ensuring the solvency of onchain platforms, they place an enormous burden on users to maintain their position lest they be liquidated. ETH Strategy solves this headache for DeFi-natives by transforming short-term liquidation risk into long-term solvency risk. Along the way, the protocol creates a robust two-sided market that brings together leverage seekers and volatility farmers.

Liquidation-based leverage is the default in crypto. Borrow against collateral, let the system set a threshold, and if the market dips you are forcibly unwound. Liquidators step in, seize and sell collateral, and collect penalties. Users pay the bill and often watch the asset rebound after they are sidelined.

The incentives around this model are strong. Liquidators, market makers, and risk vendors all earn reliable revenue from penalties, spreads, and funding. Protocols value the simplicity because it keeps them solvent and liquidations are easy to reason about, so fees and penalty levels rarely change. In DeFi, penalties on major assets often sit around five percent or more, while CeFi may be closer to two percent but with opaque processes and internalized risk.

For borrowers, that gap matters. Over-collateralized loans still carry meaningful tail risk onchain, not to mention constant anxiety about being liquidated. Perpetual futures introduce their own costs through funding and slippage. The entire stack is optimized for enforcement, not for user outcomes.

Clear risk limits and solvent protocols are good. We like them. They should remain. But users also deserve alternatives that do not rely on forced sales as the core mechanism. We believe the next wave of DeFi should convert price swings into yield, shift risk into time rather than cliff events, and create new forms of value instead of recycling the same penalty-driven playbook.

The idea behind ETH Strategy began to solve exactly these problems. Many astute Twitter sleuths have discovered that prior to @eth_strategy our Twitter account was @oncredxyz. Instead of taking loans against over-collateralized positions, eligible users would obtain a line of credit to purchase ETH. Gone would be the days of losing upside after liquidations, credit-worthy users could repay a line of credit over time while maintaining exposure to ETH’s upside. The problem, high upfront costs for verifying creditworthiness and limited lender appetite in high interest rate environments.

Our founders are something of ETH maxis (sorry not sorry), so paid little attention to Michael Saylor’s antics in 2021. But by late 2024, MicroStrategy’s… strategy… was undeniable. It was time to peer under the hood to see what this Bitcoin Treasury Company was really doing. What we discovered was shocking, MSTR’s financial alchemy was the solution we were seeking all along, long-term leverage exposure without short-term liquidation risk.

But it’s not obvious at first glance. Many notice the access play: institutions want exposure to the emerging crypto market. Fewer understand the complex financial instruments that Saylor offers, and why. Digital asset treasury (DAT) convertibles are all about the embedded option and volatility. Suffice to say that convertible debt offers buyers a uniquely valuable instrument, one with both downside protection and upside exposure. We’ll save the deep-dive for office hours with our quant.

Having been thoroughly DAT-pilled, the next obvious step was to bring this strategy onchain. After all, Ethereum smart contracts are the perfect vehicle to construct and automate digital asset treasuries. No gatekeepers, no middlemen.

So the founders kept poking at the idea, specifically working to design it in a DeFi-native way. We knew early on that mimicking the exact TradFi implementation would not work onchain.

After extensive conversations with DeFi founders and drawing on insights from proven models, the idea crystallized into a whitepaper. ETH Strategy was first announced in January 2025. The early draft was published on Clouted’s personal blog and sent to a bunch of ETH bulls and friends. Within weeks we had a strong, high-signal group from the Ethereum ecosystem exploring the idea, notably at a time when the timeline shifted bearish on ETH.

The founders decided we had enough validation and excitement to give it a proper crack, and went on to assemble a team of crypto-natives from various backgrounds and skills. We have DeFi veterans, PhD quants, top-tier investors, and trusted ETH-aligned voices in community building.

The journey of building ETH Strategy started with a whitepaper and became a full-blown protocol in early 2025. That was the easy part for a team of gifted quants and engineers. The real work began in the next months of relentless market validation, speaking to hundreds of funds, trading desks, and high-net-worth managers. At this time, most conversations began with convincing people that ETH was the right asset for the first onchain strategy (not SOL or BTC). 

The biggest objection we heard was that this strategy only works in TradFi, since many only viewed it as an access play for DATs to capitalize on TradFi’s untapped crypto demand. Grinding through this phase made one thing very clear: many crypto investors simply do not care to do anything onchain. While it was frustrating that not everyone shared our vision, it was encouraging that a strong subset did.

Building an onchain treasury strategy has a few distinct advantages. First, blockchains enable full transparency for treasury reserves (something that can’t be said for TradFi equivalents). Second, by existing onchain the protocol’s token is globally accessible and not limited to a specific market. We believe in democratized access, censorship resistance, and autonomous protocols. Third, building it entirely onchain emphasizes what makes Ethereum so special, smart contracts make it possible to build in a way that’s not possible with Bitcoin.

Over those early months we did the hard work explaining the volatility trade, how MSTR works, and yes, even reminding why ETH is the perfect asset to run this on. We’ll say it again, Ethereum’s existence is the only reason this structure can be encoded entirely onchain. Near the end of this process, SharpLink announced their massive raise to purchase ETH, which made selling the onchain equivalent easier (thanks Joe). We had already been working on this for months. Now we just had to find a group bold enough to believe that onchain is the right way to showcase it. After a solid round of market validation, distribution, and attention, we were ready to move into the first step of our launch.

The next phase of validation and distribution was to get the community involved through a very fair presale. This was the optimal path, raising ETH from a high-signal and long-term aligned community, allowing us to build a strong social layer as well as a strong treasury layer to absorb bonding demand. 

We also realized we needed to automate the gamma trade (“vaultify” it, if you will) for it to really gain adoption. However to capture this bonding demand we first needed a strong equity layer, because unlike TradFi, when you build onchain you must bootstrap liquidity yourself.

Within two months, the team raised 6,900 ETH in a private presale. We then opened the same terms to anyone, consistent with our DeFi values of democratized access, and closed another 1,242 ETH in a one-hour public presale. The team then secured a very strategic investor who committed an additional 4,200 ETH as a puttable warrant on slightly worse terms than the presaylors. This solidified our equity layer. Just as ETH began to heat up, we had our equity layer in place, a very high signal community of backers, and we were ready to hit the scene.

On July 29th, ETH Strategy launched the STRAT token, which brought us to the starting line after 6 long months of headaches and heartbreaks.

We have now taken ETH Strategy from idea to: 

1. Building the entire protocol 

2. Completing a private and public raise

3. Bootstrapping a treasury of Bootstrapping a treasury of over 11k ETH

4. Launching the STRAT token

5. Forming a strong community of STRAT bulls

From here, we will roll out the protocol in phases. This will include:

1. Deploying the treasury in DeFi, increasing EPS for STRAT holders

2. Lending ETH to STRAT holders, giving the token utility and a soft floor price

3. Launching the Perpetual Bonding Vault, a new volatility vault primitive for DeFi

4. Growing the equity layer via At-the-Market (ATM) programs 

5. Rolling out permissionless convertible notes (CDT + Options)

Watch us innovate in DeFi. 
Watch us kickstart the flywheel and turbo-long ETH. 
Watch us showcase the power of smart contracts against TradFi.

Join the Telegram: https://t.me/ethstrat
Follow us on Twitter: https://x.com/eth_strategy
Turn notifications ON and watch us cook.

We built ETH Strategy to solve the top issue facing DeFi users today, getting liquidated while being giga-long ETH. While robust liquidation engines are crucial to ensuring the solvency of onchain platforms, they place an enormous burden on users to maintain their position lest they be liquidated. ETH Strategy solves this headache for DeFi-natives by transforming short-term liquidation risk into long-term solvency risk. Along the way, the protocol creates a robust two-sided market that brings together leverage seekers and volatility farmers.

Liquidation-based leverage is the default in crypto. Borrow against collateral, let the system set a threshold, and if the market dips you are forcibly unwound. Liquidators step in, seize and sell collateral, and collect penalties. Users pay the bill and often watch the asset rebound after they are sidelined.

The incentives around this model are strong. Liquidators, market makers, and risk vendors all earn reliable revenue from penalties, spreads, and funding. Protocols value the simplicity because it keeps them solvent and liquidations are easy to reason about, so fees and penalty levels rarely change. In DeFi, penalties on major assets often sit around five percent or more, while CeFi may be closer to two percent but with opaque processes and internalized risk.

For borrowers, that gap matters. Over-collateralized loans still carry meaningful tail risk onchain, not to mention constant anxiety about being liquidated. Perpetual futures introduce their own costs through funding and slippage. The entire stack is optimized for enforcement, not for user outcomes.

Clear risk limits and solvent protocols are good. We like them. They should remain. But users also deserve alternatives that do not rely on forced sales as the core mechanism. We believe the next wave of DeFi should convert price swings into yield, shift risk into time rather than cliff events, and create new forms of value instead of recycling the same penalty-driven playbook.

The idea behind ETH Strategy began to solve exactly these problems. Many astute Twitter sleuths have discovered that prior to @eth_strategy our Twitter account was @oncredxyz. Instead of taking loans against over-collateralized positions, eligible users would obtain a line of credit to purchase ETH. Gone would be the days of losing upside after liquidations, credit-worthy users could repay a line of credit over time while maintaining exposure to ETH’s upside. The problem, high upfront costs for verifying creditworthiness and limited lender appetite in high interest rate environments.

Our founders are something of ETH maxis (sorry not sorry), so paid little attention to Michael Saylor’s antics in 2021. But by late 2024, MicroStrategy’s… strategy… was undeniable. It was time to peer under the hood to see what this Bitcoin Treasury Company was really doing. What we discovered was shocking, MSTR’s financial alchemy was the solution we were seeking all along, long-term leverage exposure without short-term liquidation risk.

But it’s not obvious at first glance. Many notice the access play: institutions want exposure to the emerging crypto market. Fewer understand the complex financial instruments that Saylor offers, and why. Digital asset treasury (DAT) convertibles are all about the embedded option and volatility. Suffice to say that convertible debt offers buyers a uniquely valuable instrument, one with both downside protection and upside exposure. We’ll save the deep-dive for office hours with our quant.

Having been thoroughly DAT-pilled, the next obvious step was to bring this strategy onchain. After all, Ethereum smart contracts are the perfect vehicle to construct and automate digital asset treasuries. No gatekeepers, no middlemen.

So the founders kept poking at the idea, specifically working to design it in a DeFi-native way. We knew early on that mimicking the exact TradFi implementation would not work onchain.

After extensive conversations with DeFi founders and drawing on insights from proven models, the idea crystallized into a whitepaper. ETH Strategy was first announced in January 2025. The early draft was published on Clouted’s personal blog and sent to a bunch of ETH bulls and friends. Within weeks we had a strong, high-signal group from the Ethereum ecosystem exploring the idea, notably at a time when the timeline shifted bearish on ETH.

The founders decided we had enough validation and excitement to give it a proper crack, and went on to assemble a team of crypto-natives from various backgrounds and skills. We have DeFi veterans, PhD quants, top-tier investors, and trusted ETH-aligned voices in community building.

The journey of building ETH Strategy started with a whitepaper and became a full-blown protocol in early 2025. That was the easy part for a team of gifted quants and engineers. The real work began in the next months of relentless market validation, speaking to hundreds of funds, trading desks, and high-net-worth managers. At this time, most conversations began with convincing people that ETH was the right asset for the first onchain strategy (not SOL or BTC). 

The biggest objection we heard was that this strategy only works in TradFi, since many only viewed it as an access play for DATs to capitalize on TradFi’s untapped crypto demand. Grinding through this phase made one thing very clear: many crypto investors simply do not care to do anything onchain. While it was frustrating that not everyone shared our vision, it was encouraging that a strong subset did.

Building an onchain treasury strategy has a few distinct advantages. First, blockchains enable full transparency for treasury reserves (something that can’t be said for TradFi equivalents). Second, by existing onchain the protocol’s token is globally accessible and not limited to a specific market. We believe in democratized access, censorship resistance, and autonomous protocols. Third, building it entirely onchain emphasizes what makes Ethereum so special, smart contracts make it possible to build in a way that’s not possible with Bitcoin.

Over those early months we did the hard work explaining the volatility trade, how MSTR works, and yes, even reminding why ETH is the perfect asset to run this on. We’ll say it again, Ethereum’s existence is the only reason this structure can be encoded entirely onchain. Near the end of this process, SharpLink announced their massive raise to purchase ETH, which made selling the onchain equivalent easier (thanks Joe). We had already been working on this for months. Now we just had to find a group bold enough to believe that onchain is the right way to showcase it. After a solid round of market validation, distribution, and attention, we were ready to move into the first step of our launch.

The next phase of validation and distribution was to get the community involved through a very fair presale. This was the optimal path, raising ETH from a high-signal and long-term aligned community, allowing us to build a strong social layer as well as a strong treasury layer to absorb bonding demand. 

We also realized we needed to automate the gamma trade (“vaultify” it, if you will) for it to really gain adoption. However to capture this bonding demand we first needed a strong equity layer, because unlike TradFi, when you build onchain you must bootstrap liquidity yourself.

Within two months, the team raised 6,900 ETH in a private presale. We then opened the same terms to anyone, consistent with our DeFi values of democratized access, and closed another 1,242 ETH in a one-hour public presale. The team then secured a very strategic investor who committed an additional 4,200 ETH as a puttable warrant on slightly worse terms than the presaylors. This solidified our equity layer. Just as ETH began to heat up, we had our equity layer in place, a very high signal community of backers, and we were ready to hit the scene.

On July 29th, ETH Strategy launched the STRAT token, which brought us to the starting line after 6 long months of headaches and heartbreaks.

We have now taken ETH Strategy from idea to: 

1. Building the entire protocol 

2. Completing a private and public raise

3. Bootstrapping a treasury of Bootstrapping a treasury of over 11k ETH

4. Launching the STRAT token

5. Forming a strong community of STRAT bulls

From here, we will roll out the protocol in phases. This will include:

1. Deploying the treasury in DeFi, increasing EPS for STRAT holders

2. Lending ETH to STRAT holders, giving the token utility and a soft floor price

3. Launching the Perpetual Bonding Vault, a new volatility vault primitive for DeFi

4. Growing the equity layer via At-the-Market (ATM) programs 

5. Rolling out permissionless convertible notes (CDT + Options)

Watch us innovate in DeFi. 
Watch us kickstart the flywheel and turbo-long ETH. 
Watch us showcase the power of smart contracts against TradFi.

Join the Telegram: https://t.me/ethstrat
Follow us on Twitter: https://x.com/eth_strategy
Turn notifications ON and watch us cook.