Sharplink, Galaxy Digital Launch $125M On-Chain Yield Fund

Sharplink and Galaxy Digital announced the launch of a $125 million on-chain yield fund on May 11. Sharplink committed $100 million from its staked Ethereum treasury and Galaxy Digital committed $25 million. Galaxy Digital will serve as sole investment manager for the private vehicle.

Galaxy will choose DeFi protocols, set position sizes and apply risk controls for lending and liquidity-provision strategies on decentralized finance platforms. The fund will be funded from Sharplink’s active ETH treasury as the company expands beyond passive staking.

Sharplink reported a net loss of $685.6 million for the quarter ended March 31, 2026. The loss included a $506.7 million unrealized loss on ETH holdings and a $191.7 million impairment on liquid staking tokens under U.S. GAAP fair-value accounting. Sharplink said those charges are non-cash and do not change the number of tokens on its balance sheet.

As of May 4 the company held 872,984 ETH, valued at about $1.7 billion. Since launching an actively managed ETH treasury in June 2025, Sharplink has generated roughly 18,800 ETH in staking rewards. The company reported revenue of $12.1 million for the quarter, up from $0.7 million a year earlier, driven mainly by the active ETH treasury program. Cash and equivalents fell to $16.9 million from $28.5 million at year-end 2025, and selling, general and administrative expenses rose to $9.9 million as Sharplink internalized much of its asset management platform. Sharplink’s ETH-per-share metric rose to 4.02 from 2.0 in June 2025.

Native Ethereum staking yields have declined to roughly 2.5%–3.5% annually. Sharplink’s market-to-net-asset-value ratio was 0.79, indicating the share price traded below the fiat value of the ETH on its books. The company has cited lower native yields and market valuation pressure in explaining the decision to seek higher returns through DeFi lending and liquidity strategies.

Galaxy Digital, founded by Mike Novogratz, has been deploying capital on-chain since 2020 and closed a $175 million venture fund in June 2025 focused on early-stage DeFi, stablecoins and blockchain infrastructure. The new fund targets lending and liquidity positions that can produce higher annual returns but carry greater risk than passive staking.

The fund launch follows a string of security incidents in DeFi. On April 1, attackers linked to North Korea stole $285 million from a decentralized derivatives exchange through a social-engineering campaign. April 2026 saw the highest number of crypto hacking incidents on record, with a large share of 2026 losses through April attributed to North Korea-linked operations. Sharplink’s leadership indicated they plan to allocate to protocols that prioritize security.

Joseph Chalom, Sharplink’s chief executive and former head of digital assets at BlackRock, wrote in a statement: “Out of any financial crisis, whether in traditional finance, DeFi, or other sectors, you end up raising the standards for the next wave of entrants and the next deployments and allocations.” He added that Sharplink had “deployed our ETH capital with discipline, internalized the majority of our asset management platform, and have moved beyond foundational staking into a broader set of on-chain opportunities.”