Galaxy Digital and Sharplink are launching a $125 million fund to deploy capital into decentralized finance yield strategies, a move that pushes deeper into higher-risk onchain opportunities.
"This fund is the clearest expression of that conviction," Sharplink CEO Joseph Chalom said, highlighting the strategy to make the company's Ethereum treasury "maximally productive."
The Galaxy Sharplink Onchain Yield Fund, LP, will consist of a $100 million commitment from Sharplink's staked Ethereum treasury and $25 million from Galaxy. Galaxy will manage the fund, selecting protocols and managing risk for a strategy designed to capture returns that can exceed 10 percent annually, a significant step up from the roughly 2.5 percent to 3.5 percent currently earned from staking.
The partnership puts part of Sharplink’s 872,984 ETH treasury to work beyond passive staking, seeking to boost returns as its market value trades at a discount to its crypto holdings. The move comes just weeks after DeFi protocols like Kelp DAO and Drift suffered hacks totaling over $570 million in April, a backdrop that Chalom argues will raise security standards for institutional-grade participants.
The new fund represents a strategic evolution for Sharplink, the second-largest corporate holder of Ethereum with a treasury valued at $2.1 billion. The company's stock currently trades at an mNAV of 0.79, meaning its equity is valued at less than its digital asset reserves. By pursuing more active strategies like lending and liquidity provisioning, Sharplink aims to generate excess returns that accrue back to shareholders.
"We’ve been very vocal that our job as an Ethereum treasury company is to make our ether productive first and, over time, to maximize that productivity,” said Chalom, the former head of digital assets strategy at BlackRock.
The collaboration gives Sharplink access to Galaxy's institutional research and risk management framework. Galaxy has been actively deploying hundreds of millions of dollars in onchain strategies since 2020.
"Institutional capital is moving onchain, and the infrastructure to support it has matured to a point where allocators can access yield, liquidity, and risk management with the same rigor they expect in traditional markets,” said Mike Novogratz, Founder and CEO of Galaxy.
The move is not without risk. The DeFi sector was hit by a series of high-profile exploits in April. North Korean hackers were blamed for the theft of $285 million from Drift Protocol and a separate $292 million attack on Kelp DAO. Chalom, however, sees the recent turmoil as a catalyst for improving standards.
“Those in DeFi who take the time to put security first will be the survivors, and we’re going to support and invest in those protocols," Chalom said. "All those who don’t meet institutional standards will likely no longer be able to attract capital.”
Sharplink reported its first-quarter earnings on May 11, posting a net loss of $685.6 million, largely due to a $506.7 million unrealized loss on its crypto assets and a $191.7 million impairment charge under US GAAP accounting rules. The company noted these do not represent realized economic losses. Since launching its treasury strategy in June 2025, Sharplink has generated 18,800 ETH in staking rewards.
This article is for informational purposes only and does not constitute investment advice.
