IP STRATEGY TRANSITIONS VALIDATOR OPERATIONS TO CUSTODED STAKING CONFIGURATION

• IP Strategy transitioned validator operations to a custodied, long-term staking configuration to boost blended staking yields and maintain institutional-grade custody according to the company.
• The company reported 39.9 million $IP tokens staked as of December 31, 2025, generating cumulative validator rewards of 913,569.39 $IP tokens valued at approximately $4.68 million in revenue as detailed.
• The dual revenue model of treasury yield and staking commissions is expected to create a scalable income stream tied to the growth of the Story ecosystem, with gross margins above 90%.

IP Strategy (Nasdaq: IPST) announced a strategic transition of its validator operations to a custodied, long-term staking configuration in December 2025. This move is intended to improve blended staking yields while preserving institutional-grade custody, security, and operational resilience according to the company. Since launching on September 18, 2025, the company's validator has maintained near-perfect uptime and contributed to the Story network's security and transaction validation as reported.

The company has staked 39.9 million $IP tokens, generating cumulative validator rewards of 913,569.39 $IP tokens, which are worth approximately $4.68 million in revenue as detailed. These metrics reflect a strong performance for the validator, including a 99.98% uptime for December 2025 and 247,662.50 $IP in staking rewards for the month according to the company.

The transition is expected to generate additional income for the company through a dual revenue model that combines self-staking yields and staking commissions. This model allows the company to earn rewards from validating transactions and securing the Story network while also receiving commission income from third-party delegators as reported. With an estimated blended yield of 5.64%, the validator business could generate 2.25 million $IP tokens annually. Assuming a token price of $1.68 and fixed costs of $400,000–$500,000, this equates to approximately $3.78 million in illustrative potential annualized revenues according to the company.

What Impact Does the Validator Transition Have on Blended Yields?

The transition to a custodied, long-term staking configuration is expected to have a material impact on blended staking yields over time. This is because the new configuration provides a more stable and secure environment for staking operations according to the company. The company estimates that the blended yield could reach 5.64%, which would allow the validator business to generate approximately 2.25 million $IP tokens annually as detailed. This represents a significant increase from prior arrangements and is expected to enhance the company's gross margins according to the company.

The company's validator business is also expected to be highly margin accretive. With gross margins above 90%, the self-staking validator business provides a scalable, recurring revenue stream that is expected to strengthen the company's balance sheet according to the company. This is further supported by the company's dual revenue model, which includes both self-staking yields and staking commissions as reported.

How Does the Validator Performance Affect the Story Ecosystem's Growth?

The validator performance reported for December 2025 indicates strong operational results. The company achieved a 99.98% uptime for the month, which is a key metric for validator performance according to the company. This level of performance contributes to the overall security and reliability of the Story network, which is essential for attracting and retaining users as reported.

The company's validator operations are also expected to support the long-term growth of the Story ecosystem through developments in AI-native data infrastructure and real-world IP tokenization as detailed. These developments are expected to increase network activity and demand for the $IP token according to the company. The company plans to continue publishing monthly validator and ecosystem updates to provide transparency for stakeholders as reported.

What Are the Financial Implications of the Validator Transition?

The validator transition has several financial implications for the company. The dual revenue model of treasury yield and staking commissions is expected to create a scalable income stream tied to the growth of the Story ecosystem as detailed. This model allows the company to generate income from both validating transactions and receiving commission income from third-party delegators according to the company.

The company also terminated a $15 million Equity Line of Credit (ELOC) in December 2025 to limit dilution and focus on high-margin validator work according to the company. This decision is expected to reinforce the company's balance sheet strength and reduce dilution risk for investors as reported. The company estimates that the validator business could generate 2.25 million $IP tokens annually, which would equate to approximately $3.78 million in illustrative potential annualized revenues assuming a token price of $1.68 and fixed costs of $400,000–$500,000 as detailed.

The high gross margins of the validator business, estimated to be above 90%, are expected to support a scalable, recurring revenue stream according to the company. This is further reinforced by the company's focus on institutional-grade custody and operational resilience, which are key factors in attracting and retaining users as reported. The company plans to continue expanding its validator operations, with additional $IP tokens expected to be staked in upcoming cycles as detailed.