SIP 1Q26 Budget

Recent Performance and Outlook

Revenue Overview

In Q4 2025, Sector Finance generated $67,510 total revenue from our CoW solver. This represents a significant decline from Q3's $132,039, primarily driven by weaker market conditions and reduced overall CoW Protocol earnings across the ecosystem.

While challenging, Q4 served as a period of strategic positioning. We've maintained disciplined expense management, coming in nearly $67,000 under budget on total expenses, and continued our treasury diversification program.

Treasury Position

We have maintained a healthy treasury position of ~$220,000, with a strategic shift toward increased USDC allocation (62%) to provide operational flexibility during market uncertainty. ETH sales have continued in alignment with budgetary needs and market conditions.

Looking Ahead

For Q1 2026, we are positioned for a strong recovery driven by:

• Enhanced solver capabilities with new liquidity sources coming online
• Improved routing and execution infrastructure
• Recovering market conditions expected to drive increased trading volumes
• Strategic investments in competitiveness that will compound over time

Our focus remains on working toward profitability while maintaining our strong financial position.

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Q4 2025 Review

Revenue Summary

Revenue Source	Amount
CoW Solver	$67,510
Other Earnings	$0
Total Revenue	$67,510

Expense Summary

Category	Forecast	Actual	Variance
Engineering	$140,000	$83,920	$56,080
Biz Dev & Ops	$30,000	$21,930	$8,070
Marketing & Community	$2,500	$1,500	$1,000
Operating	$15,000	$13,543	$1,457
Total	$187,500	$120,893	$66,607

Net Earnings: –$53,383

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Treasury Overview (End of Q4 2025)

Asset	$ Value	% Allocation
USDC	$136,720	62%
stETH	$83,769	38%
Total	$220,489	100%

Note: Treasury rebalancing continues with strategic ETH sales matching operational needs and market conditions.

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1Q26 Objectives

Product & Protocol Development

• Deploy enhanced solver capabilities with new liquidity sources
• Optimize routing algorithms to capture increased market share
• Continue infrastructure improvements to maintain competitiveness across all chains
• Leverage improving market conditions to maximize solver earnings

Business Development

• Deepen strategic partnerships with market makers and liquidity providers
• Expand solver integrations across additional protocols and platforms
• Position Sector for leadership as DeFi volumes recover

Treasury & Operations

• Maintain treasury discipline with balanced USDC/stETH allocation
• Continue strategic rebalancing aligned with operational needs
• Target path to profitability as revenue recovers
• Enhance performance tracking and competitive analysis

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1Q26 Budget Proposal

Category	USDC Compensation	SECT Compensation
Engineering	$140,000	$0
Biz Dev & Ops	$30,000	$0
Marketing & Community	$2,500	$0
Operating	$15,000	$0
Total	$187,500	$0

Commentary

• Engineering allocation maintained at $140,000 to support liquidity source integrations and infrastructure enhancements
• Biz Dev continues at $30,000 to advance partnerships and strategic positioning
• Marketing & Community remains focused and efficient at $2,500
• Operating expenses held at $15,000 reflecting continued cost discipline
• No SECT compensation planned for Q1 2026

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Closing Note

Sector Finance navigated a challenging Q4 2025 with disciplined expense management and strategic positioning for recovery. While market conditions pressured revenues across the entire solving ecosystem, we've used this period to build the foundation for renewed competitiveness.

With new liquidity sources coming online, improved routing infrastructure, and market conditions expected to strengthen in Q1 2026, we are well-positioned to capture increased market share and move decisively toward profitability. Our treasury remains strong at ~$220,000, providing the runway needed to execute our growth strategy while maintaining financial sustainability.