SharpLink, Galaxy launch $125M on-chain yield fund – Details
Is this a new strategy by Sharplink to strengthen its ETH holdings?
The second-largest Ethereum [ETH] DAT, Sharplink, is investing $100 million of its existing Ethereum stock in a fund run by Galaxy Digital.
Called the “onchain yield fund” Galaxy will contribute an additional $25 million of its own funds, increasing the fund’s total committed capital to $125 million.
What does this mean for Sharplink?
That said, the fund aims to produce more returns from the ETH and other digital-asset opportunities by employing blockchain-based tactics. Traditionally, a business that owns Ethereum could stake it and receive rewards for doing so.
But the “on-chain yield” strategy goes one step further by integrating digital assets into different blockchain protocols and financial applications to generate returns.
This could include lending, liquidity provision, staking or restaking, or other decentralized finance (DeFi) activities, depending on the approach. Simply put, instead of holding the assets passively, the fund is actively putting capital to work, and that is what matters.
With this move, Sharplink may be able to boost the economic value produced by its ETH holdings without depending entirely on ETH’s price growth if the strategies work.
In this, Galaxy will oversee the fund, evaluate DeFi opportunities, perform due diligence, and control risks like market volatility, liquidity problems, and smart contract failures, making its role crucial.
Execs weigh in
Remarking on the same, Mike Novogratz, Founder and CEO of Galaxy, said,
We’re entering a new phase of institutional adoption, with capital moving from passive ownership to active participation in blockchain-based markets.
Echoing similar sentiments, Joseph Chalom, CEO of Sharplink, added,
We believe this Fund marks a next step for Sharplink expanding its ETH treasury management strategy.
Sharplink’s ETH bet
This occurred while Sharplink’s Ethereum holdings were valued at $1.66 billion, or 868,699 ETH. Meanwhile, it has now earned 24,338 ETH in total staking rewards.
This was while its stock price was at $6.43 following a 2.23% increase in the previous trading day. In contrast, the price of Ethereum was at $1,916.03 following a slight increase of 0.24% over the previous day.
Final Summary
- Rather than just accumulating and holding Ethereum, Sharplink is essentially using a portion of its ETH treasury as productive capital.
- Galaxy Digital is contributing an additional $25 million to Sharplink’s $100 million ETH treasury.
