Most people track PURR (previously called Hyperliquid Strategies or HSI) for one reason: it’s one of the HYPE DATs (actually the biggest one) accumulating HYPE.

So the mental model is simple: “PURR still has many millions to hold or pump the price.”

That model is useful. It’s also incomplete.

Because there’s one mechanism in the background that can quietly turn “remaining firepower” into almost unlimited ammo.

And once you see it, you stop looking at PURR like a wallet with a balance.

You start looking at it like something else.

Context if you missed it

Before continuing, if you want to dive deeper on PURR and its relation with HYPE, I suggest you take a look at my previous article, especially point 3.

The numbers are a bit outdated, but we’ll get to this later here.

Sources and assumptions

Once again, I’m taking all the info from the S-1 form officially published. I will also make some assumptions in this article based on some interviews.

Getting to the point

What else you should know besides that PURR still might have $100M+ firepower to buy HYPE?

Basically this:

  1. Their firepower might not be just $100M+
  2. It might not be capped by a fixed treasury
  3. It can be dynamically scaled by mNAV and market liquidity

To understand this, let’s get to the DAT basics 101.

DAT basics 101

A Digital Asset Treasury (DAT) is a company whose main goal is to accumulate crypto. It is funded mostly in 3 ways:

  1. Investors that want to get exposure to crypto at a discount offer cash. They get DAT shares in exchange, not crypto.
  2. Crypto holders that want to “exit” their positions offer their crypto. They get cash but at a worse price than the current market price.
  3. New shares that are emitted and sold (!).

The case of PURR is a bit more complex because it’s a merger of many companies, but to keep it simple, assume it was funded with (1) and (2).

Their main goal is, or should be, to make their shareholders earn the most, not to pump a crypto.

Most DATs follow the pump and dump path, failing almost like a rug.

This is where Market Net Asset Value (mNAV) comes in.

mNAV is a metric used to check if the shares of a company are trading at a discount or at a premium.

Quick example:

  1. Assume a HYPE DAT with $1B in HYPE assets with no debts or cash balance.
  2. Assume it has 500,000 shares valued at $2,000 each.
  3. The mNAV would be: (500,000 x 2,000) / 1,000,000,000 = 1 (this would mean it’s a fair price)

If shares were more expensive, the company would trade at a premium (>1 mNAV).

If they were cheaper, at a discount (<1 mNAV).

Now let’s go back to (3), which is the important and tricky part in DATs.

The fork in the road: how DATs issue shares

Some DATs mint shares and sell them OTC to other buyers at a discount and with a short vesting.

This creates the classic death spiral:

  1. those buyers dump once vesting ends
  2. share price goes down
  3. if they want to raise more they have to offer bigger discounts
  4. mNAV goes down
  5. repeat

Other DATs mint ATM shares once the mNAV is at a premium.

An ATM (At-The-Market) share issuance simply means issuing new shares and selling them directly into the open market, gradually, while respecting liquidity and volume constraints.

These ATM shares are sold at market-referenced prices (typically VWAP-based), not via discounted OTC placements.

One subtle but important detail is how this pricing works in practice.

Because the ATM references VWAP rather than the last traded price, periods of strong upside momentum can create a temporary gap where the spot price trades above the VWAP. When that happens, new shares can be absorbed by the market slightly below the current spot price, without any explicit discount or preferential terms.

For example, if PURR trades at $10 and runs to $12 intraday while the VWAP sits at $10.80, ATM shares are effectively sold ~10% below spot, even though they are still priced “at market”. As volume builds at higher levels, the VWAP naturally catches up.

As you expected, PURR chose the second path.

This is where things start getting interesting.

The next question: when and how much can PURR mint?

Based on some interviews, David Schamis mentioned that when PURR trades at >1 mNAV they will consider issuing ATM shares.

Based on some calculations made by Keisan, current mNAV is roughly 1.10, meaning they could issue shares right now if they wanted to.

Keisan mNav calculations at 03/02 prices

But… how man

This is where most people stop.

And this is exactly where the edge starts.

The S-1 mechanics people don’t understand

As extracted from the S-1 filing, Chardan (the intermediary that sells the shares in the market) is limited to 4.99% beneficial ownership, meaning it cannot warehouse more than roughly $50M worth of PURR at current prices.

This doesn’t mean they can’t issue more than that. It means they can’t hold more than that at any given time. As long as the shares are sold into the market, more can be issued. Separately, in practice Chardan will also be constrained by trading rules and market-manipulation limits, which typically keep ATM desks below ~20% of daily volume.

Last day PURR traded roughly 7M shares (~$42M), meaning that at this pace Chardan could sell around $8.4M per day through the ATM.

The punchline

In other words: if volume stays like this, they could have ~$8M per day more firepower to buy HYPE.

Once again, it doesn’t mean they will topblast the books, but the incentive structure is different from a PIPE.

With capital raised via a PIPE, there is little reason to rush execution, you can sit on cash and wait for sellers.

With capital raised via ATM shares, incentives can shift.

If issuance capacity scales with volume and momentum, and higher PURR volume keeps the ATM window open, then maintaining strong HYPE momentum can actually expand future issuance capacity.

In that setup, buying aggressively during strength is no longer irrational. It can be a way to, sustain liquidity, keep volume elevated and maximize how much capital can be raised through the ATM over time.

That does not mean “blindly topblasting the books”, it means that, under certain conditions, absorbing sellers quickly or even leaning into momentum can be strategically rational.

This is what most people miss.

They model PURR like a buyer with a shrinking balance, but if the ATM is “on” (mNAV premium) and liquidity is real, then the constraint is not “how much cash is left”.

The constraint becomes: How much can you feed into the market while keeping momentum and liquidity alive, without becoming the market itself?

If every DAT has failed, why would it work this time?

Because most DATs failed for structural reasons and for holding bad assets, not because “the idea is always bad”.

They failed because:

  1. Bad issuance mechanics Discounted OTC placements + short vesting incentivize dumping. You create your own forced sellers.
  2. Underlying assets that do not carry themselves If the asset has low productive yield (or none), you need price appreciation to justify the loop. When price stalls, the whole story dies.
  3. Supply inflation narratives If the underlying is inflationary (or has heavy emissions), you are fighting a mechanical headwind.
  4. Shareholder optics Issuing into a discount (mNAV < 1) is a self-inflicted wound. It dilutes hard, kills sentiment, and makes the next raise even worse.

HYPE avoids most of the failure modes above:

  1. Protocol revenues ultimately translate into token demand and value accrual for HYPE holders
  2. Supply dynamics are deflationary under sustained usage, not structurally inflationary
  3. There are no big bagholders or VCs with vesting remaining

That combination matters.

Because it is the difference between “this only works if numba goes up” and “this can keep working even if the market chops, as long as the fundamentals stay intact”.

It still has failure modes, obviously: mNAV can compress, volume can dry up, the ATM can be paused, or the HYPE narrative can weaken.

But structurally, HYPE is one of the few assets where the DAT loop is not automatically a scam machine.

The part I used to midcurve

Lastly, some people might think that PURR is a bad investment due to the issuing of shares (I used to midcurve this a lot) might suppress the price.

But you should remember that things could get crazy when tradfi understands how this barbell actually works:

  1. MSTR went to 3.3x mNAV
  2. Metaplanet to 8.3x
  3. BMNR to 5.6x

And those are full of shit. Imagine what a good one can do.

Turn on the printer Bobby.

Hyperliquid.