<div id="readability-page-1"><div><div><p>Author: Gu Yu, ChainCatcher</p><p>After several months, another Layer 1 public chain has recently seen a financing round with a valuation of around $1 billion. Pharos, touted as a high-performance parallel Layer 1 public chain, announced a new round of capital cooperation upgrade with GCL New Energy, a Hong Kong Stock Exchange-listed company. GCL New Energy completed its investment subscription in Pharos at a valuation of $950 million, amounting to $24.73 million.</p><p>GCL New Energy is a well-known private photovoltaic power generation company in China, mainly engaged in the development, construction, operation, and management of solar power plants. This aligns very well with Pharos's RWA (Resilient Web Application) development focus, making this a transaction with positive strategic significance for both parties.</p><p>GCL New Energy is a well-known private photovoltaic power generation company in China, mainly engaged in the development, construction, operation, and management of solar power plants. This aligns very well with Pharos's RWA (Resilient Web Application) development focus, making this a transaction with positive strategic significance for both parties.</p><p> ... However, this transaction has also raised many questions in the market. Given the current dismal secondary market, can Layer 1 and RWA projects truly still achieve a valuation of $1 billion in the primary market? And will listed companies readily invest in such high-risk assets? The Intertwined Performance-Based Transaction: Many details hidden within the complex announcements reveal that this is not a conventional direct financing transaction, but rather a bundled transaction involving mutual investment, phased delivery, and a market capitalization performance-based agreement. Furthermore, all core delivery conditions are firmly in the hands of GCL New Energy. If any condition is not met, this transaction will be nothing more than a worthless piece of paper without any substantial binding force. Pharos's share subscription in GCL New Energy is a pre-contractual investment. It will subscribe for up to 183,480,000 new shares at HK$1.05 per share, valued at approximately HK$150 million. This price represents a 15% discount to GCL New Energy's current share price (HK$1.23). While this transaction appears to be a bargain for Pharos, GCL New Energy is clearly adept at financial maneuvering. It has set five stringent closing conditions for this share subscription transaction, and if any batch of closing conditions is not met, all subsequent closings will be terminated. The entire agreement is only valid for 18 months. Specifically, this investment is split into five tranches, with all unlocking conditions tied to the performance of Pharos Token upon its listing: The first tranche, at 50%, will only proceed if Pharos Token successfully obtains approval for listing on a relevant Web3 exchange and its opening price is not lower than the company's agreed investment price (based on a valuation of $950 million). If the listing fails or the opening price falls below the initial offering price, the company has the right not to proceed with the settlement. The second tranche, at 12.5%, will only proceed if the average daily FDV (fully diluted market capitalization) for Pharos Token in the three months prior to its listing is not lower than $760 million. The unlocking conditions for the subsequent three tranches are largely similar, with the main difference being the calculation period for the average FDV: the fourth to sixth month, the seventh to ninth month, and the ninth to twelfth month, respectively. Once the Pharos Token meets the settlement conditions, Pharos's share subscription in GCL New Energy will take effect accordingly, and GCL New Energy's Pharos Token subscription will also take effect simultaneously, with the unlocking ratio being the same. In other words, after the Pharos Token is successfully listed, Pharos will immediately deliver HK$75 million worth of shares to GCL New Energy, while GCL New Energy will acquire Pharos Tokens worth approximately HK$96.73 million at a valuation of US$950 million. For GCL New Energy, this is a near-guaranteed profit-making transaction. On the one hand, it will obtain HK$75 million in share subscription funds, and on the other hand, if the Pharos Token price performs well, it will acquire tokens worth nearly HK$100 million at the initial opening valuation, resulting in a considerable profit margin. The positive effects have already been reflected in the share price. Although GCL New Energy first disclosed its cooperation with Pharos on January 8th, its stock price had already risen sharply a week prior, from HK$0.8 to HK$1.3 on the announcement date, and then peaked at HK$1.8 before trending downwards. In the trading market, this is a typical &#34;insider trading&#34; pattern. Another potential issue is that Pharos' previously disclosed total financing was only US$8 million, equivalent to HK$62.61 million. Even if the preconditions for investment are met, this funding gap may still be a problem for Pharos. </p><p><img src="https://imageproxy.pbkrs.com/https://admin2049.chaincatcher.info/upload/image/20260315/1773552964256-602325.webp?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://admin2049.chaincatcher.info/upload/image/20260315/1773552964256-602325.webp"/></p><p><span><em>Source: RootData</em></span></p><h3>How was the $950 million valuation determined?</h3><p>Another interesting piece of information is that GCL New Energy also disclosed in detail in the agreement why it valued Pharos at $950 million.</p><p><img src="https://imageproxy.pbkrs.com/https://admin2049.chaincatcher.info/upload/image/20260315/1773552964595-315331.webp?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://admin2049.chaincatcher.info/upload/image/20260315/1773552964595-315331.webp"/></p><p>Therefore, both parties decided to set the calculation factor for Pharos at 4.75 times. Pharos's current total locked asset value is $250 million, and with a 20% discount, the initial valuation should be $950 million.</p><p>Regarding the types of on-chain locked assets, the protocol discloses that currently, 51% of all locked assets in Pharos come from new energy assets of distributed photovoltaic operators and centralized power plant operators, and 49% come from financial assets of fund management companies and credit asset issuers.</p><p>In other words, Pharos' total locked value includes physical assets in its calculation, specifically power plants and photovoltaic assets closely related to the parties involved in this transaction. This calculation method sets a precedent in the Layer 1 industry. In fact, Pharos' mainnet has not yet been officially launched, and the professional on-chain data statistics platform DeFillama has not included Pharos' locked value data. The $250 million figure is entirely a unilateral disclosure by the project team. The premature stock price fluctuations, combined with the layers of performance-based conditions and inflated valuations in the agreement, make the true purpose of this transaction clear: for GCL New Energy, this may be a financial maneuver to inflate the stock price and boost the company's market capitalization by leveraging the crypto concept; for Pharos, it's an attempt to capitalize on the listed company's tangible assets to create a high valuation and build momentum for the subsequent token listing. Both parties get what they want, but leave the market and subsequent investors with the risks. When a company with a real-world business injects its assets into a Layer 1 project and then easily creates a $950 million valuation by multiplying the value of those assets, isn't this kind of capital game outrageous? Does the crypto market really need RWA like this?</p></div></div></div>

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<p>Pharos, a Layer 1 public chain, has secured a financing round valuing it at $950 million through GCL New Energy, a solar power company. The investment involves complex performance-based conditions, with GCL New Energy holding significant control over the transaction. Pharos's share subscription in GCL New Energy is contingent on the successful listing of its token and meeting specific market capitalization thresholds. This deal raises questions about the viability of high valuations in a struggling market and highlights potential risks for Pharos amid its previous limited financing.</p>

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Dissecting Pharos: Valuation Supported by Solar Power and Others; A Shell Company Under a Guarantee?