Sharplink and Galaxy launch $125M onchain yield fund for DeFi

Sharplink and Galaxy Digital launched a $125 million institutional fund to deploy capital into onchain yield strategies, with $100 million backed by Sharplink's staked ETH treasury.

"We're entering a new phase of institutional adoption, with capital moving from passive ownership to active participation in blockchain-based markets," Mike Novogratz, founder and chief executive officer of Galaxy, said.

Galaxy manages the fund and committed $25 million of its own capital. Sharplink's $100 million comes from its staked ETH treasury, which held nearly 900,000 ETH and had earned more than 18,000 ETH in cumulative rewards as of April, according to crypto.news.

The launch extends Sharplink's push to make its ETH holdings productive beyond staking and adds the first institutional-grade onchain strategy to Galaxy's asset management platform. SBET rose 2.23 percent and GLXY gained 3.12 percent on the day.

A Treasury That Works Beyond Staking

Sharplink, founded in 2019 and based in Miami, frames the fund as the next step in its ETH treasury management strategy. Historically, corporate strategies focused on accumulation through capital market raises and staking of assets, Joseph Chalom, Sharplink's chief executive officer, said. The fund represents a disciplined allocation designed to make ETH more productive, with potential upside for shareholders.

Matthew Sheffield, Sharplink's chief investment officer, said emerging crypto protocols face a cold-start problem. Billions of dollars sit in venture funds ready to buy tokens or equity, but most of that capital does not kickstart activity within the protocols themselves. The fund aims to fill that gap for projects building in the ecosystem.

Galaxy brings an investment process built on deploying capital across digital asset markets since 2020, with proprietary research, protocol diligence and risk controls. Steve Kurz, global co-head of digital assets at Galaxy, described the fund as the first institutional-grade, scaled onchain strategy on the firm's asset management platform.

The Staking Debate Looms

The launch comes as Sharplink pushes back on a proposal that could reshape the yield its treasury depends on. Chalom has opposed EIP-8361, a draft Ethereum proposal that would burn a growing share of consensus-layer rewards as more ETH enters staking, reaching 100 percent near a 50 percent staking ratio. Validators would then stop receiving newly issued ETH.

Chalom argued that Ethereum's staking yield, roughly 2.75 percent, serves as a benchmark for interest rates across the on-chain economy, with about $35 billion locked in liquid staking products. Reducing issuance rewards to zero could raise the effective cost of capital and push returns negative after infrastructure expenses, he said. The proposal remains a draft and has not been approved for a network upgrade.

ETH traded near $1,916 at the time of writing, with no clear price reaction tied to Sharplink's opposition. The fund's deployment and the outcome of the staking debate will determine whether Sharplink's treasury strategy delivers the risk-managed returns it promises.

This article is for informational purposes only and does not constitute investment advice.