TON Strategy posts $15M staking revenue as Gram yield hits 17%

TON Strategy earned $15 million in staking revenue in the second quarter, a 400% jump from the prior quarter, after TON's Catchain 2.0 upgrade accelerated block production and lifted its annualized gross staking yield to 17%.

The company's 230.5 million Gram holdings, of which 229.9 million were staked, generated 9.4 million Gram in rewards during the quarter, according to the 10-Q filed with the SEC on Aug. 11. Gram, the native token of The Open Network, was rebranded from Toncoin in June.

"Greater network activity can expand Gram's utility by creating more reasons for developers, service providers, and users to hold, stake, or use the asset," Chief Executive Officer Kevin Wilson said on the earnings call.

The April Catchain 2.0 consensus upgrade cut TON's block interval from about 2.5 seconds to roughly 400 milliseconds, letting the network produce about 6.25 times more blocks per second. Because TON issues rewards per block, faster block times translated directly into higher validator payouts. TON Strategy's position equaled about 4.4% of total Gram supply and close to 35% of all staked Gram as of Aug. 4, per TonStat data cited in the filing.

Gross profit reached $14.3 million, holding the gross margin at 95%. Operating income from continuing operations swung to about $0.5 million from a $3.7 million loss in the first quarter. Net income before taxes came in at roughly $83.5 million, but 99.1% of that — an $82.8 million gain — came from marking Gram to fair value rather than cash operations.

The gap between token gains and actual cash is stark. Continuing operations used $10.6 million in cash during the first half, and the cash flow statement stripped out nearly $19 million in non-cash Gram consideration from net income. The company ended June with about $29 million in cash and restricted cash and no debt.

BitGo and Blockchain.com manage and stake TON Strategy's holdings through segregated nominator pools, the filing shows. The company also terminated its advisory agreement with Kingsway Capital Partners on Aug. 10 after ceasing payments in March, and expects $4 million to $5 million in annual savings from winding down its legacy Verb business.

For staking rewards to fully cover expenses, Gram must hold its value as network conditions evolve and the company must cut cash use from continuing operations. Management said it does not assume current yields will last indefinitely, with staking economics dependent on governance decisions, validator participation, and block reward settings.

This article is for informational purposes only and does not constitute investment advice.