How Digital Asset Treasuries Use Locked Tokens to Boost Valuations

Summary

Digital asset treasury companies are increasingly buying large blocks of discounted “locked” tokens from foundations and using them as backing for liquid shares, a practice that has helped inflate valuations for firms such as Sui Group, Ton Strategy Company and Avalanche Treasury. Despite transfer restrictions, these locked tokens often circulate between buyers, are staked for yield, or are structured into instruments that become tradeable sooner than promised, creating a liquidity and information mismatch. Critics say this amounts to an unfair arbitrage that disadvantages spot purchasers, undermines builder incentives, raises custody and staking‑slash risks, and could complicate liquidations or draw regulatory scrutiny. Investors should closely scrutinize lockup terms and operational risks because these practices materially affect token economics and company valuations.