ZeroStack’s $163M Treasury Crashed to $15M, Forcing Reliance on Staking Rewards Amid Going-Concern Doubts

Woofun AI reports that ZeroStack has flagged substantial doubt regarding its ability to continue as a going concern, a status driven by the catastrophic devaluation of its digital-asset treasury, which is overwhelmingly composed of the AI-focused 0G token. With traditional liquidity evaporating, the company’s strategic pivot now relies entirely on monetizing staking rewards to fund ongoing operations, a move that management admits may not guarantee long-term viability.

The financial deterioration is starkly illustrated in the Form 10-Q filed on July 31 for the quarter ended June 30. By that date, ZeroStack reported holding only $2.6 million in cash and suffering from negative working capital of $600,000. The balance sheet reflects a massive $339.1 million accumulated deficit, compounded by a $61.3 million net loss recorded for the first half of 2026.

Furthermore, the company recognized an $82.5 million loss from remeasuring digital assets at fair value. It is critical to note that this markdown represents an accounting loss rather than a realized cash loss, yet it underscores the severe erosion of asset value on paper.

At the June 30 snapshot, ZeroStack held 75.1 million 0G tokens with a recorded cost of $163.33 million, which had plummeted to a fair value of $15.17 million. When including a small Bitcoin position, total digital assets carried a $163.43 million cost against a $15.21 million fair value. These figures predate a much larger 0G acquisition that closed in July, meaning the reported collapse does not fully capture the scale of the company’s subsequent token accumulation. The disparity between cost and fair value highlights the extreme volatility inherent in the firm’s primary asset class.

Woofun AI data shows that ZeroStack recognized $3.78 million in digital-asset revenue from 6.62 million 0G tokens earned through staking during the first half, net of 1% or 2% validator commissions. To generate liquidity, the firm sold 4.94 million tokens from its rewards wallet for $2.4 million in proceeds.

However, this inflow was nearly offset by $2.47 million in cash used for operating activities over the same period. Management stated that the company expects to fund operations primarily by monetizing staking rewards and may sell some underlying token holdings if needed, but warned that rewards can decline or disappear and sales depend on token prices and market conditions.

A March 31 Form 8-K described 142,232,948 0G tokens originally contributed to Texas Blocker. After ZeroStack's acquisition of the company closed on July 20, the 10-Q's subsequent-events note said ZeroStack received 147,990,763 tokens from Texas Blocker and held 223,773,990 tokens in total, valued at about $40.5 million using the July 27 closing price. The contributed and acquired counts differ by 5,757,815 tokens. Texas Blocker was permitted to stake its holdings before the acquisition closed, but public disclosures do not explicitly attribute that entire difference to staking rewards. The transaction also carried related-party ties: Texas Blocker was formed by ZeroStack CEO Daniel Reis-Faria and CFO Dany Vaiman, and the filing says Zero Gravity Labs owned 51% of it at June 30. ZeroStack Executive Chairman Michael Heinrich was Zero Gravity's CEO when the ZeroStack transaction closed.

Market conditions remain fragile, with 0G trading near 15 cents on Aug. 1, supported by roughly $6.8 million to $7.5 million in rolling 24-hour volume. This liquidity level is insufficient to absorb large-scale sell-offs without significant price impact, reinforcing the risks associated with the company’s reliance on token monetization. The convergence of accounting losses, related-party complexities, and market illiquidity suggests that ZeroStack’s path to stability is fraught with structural challenges.