Galaxy Digital and Sharplink have announced plans to launch one of the first institutional-grade onchain yield funds backed by a publicly traded company’s Ethereum treasury, with $125 million in initial commitments.
The Galaxy Sharplink Onchain Yield Fund, structured as a limited partnership, will deploy capital across decentralized finance liquidity protocols and other onchain yield-generating strategies. Galaxy will serve as investment manager, applying the same research, exposure sizing, and risk management framework it uses across its lending, trading, and asset management businesses. The fund is planned to launch in the coming weeks, the companies said in a joint announcement.
Sharplink will contribute $100 million from its staked Ethereum treasury, while Galaxy commits $25 million — giving both parties meaningful skin in the game. The arrangement is currently governed by a non-binding memorandum of understanding, subject to definitive documentation.
Sharplink’s ETH Treasury: The Backing
The fund announcement landed alongside Sharplink’s Q1 2026 earnings release, which disclosed that the company now holds 872,984 ETH in treasury—up from 864,597 ETH at year-end 2025 — with total staking rewards since inception reaching 18,800 ETH as of May 4, 2026.
Sharplink is the second-largest publicly traded corporate holder of Ethereum, behind Bitmine Immersion Technologies, which holds over 4.5 million ETH. The company has positioned itself as the “MicroStrategy of Ethereum”—raising approximately $3.2 billion in capital markets to fund ETH acquisitions while measuring success by ETH per share (currently at 4.01) rather than GAAP earnings.
The company reported a $734.6 million net loss for 2025, driven almost entirely by $616.2 million in unrealized losses on its ETH holdings under fair-value accounting rules. Despite this, institutional ownership climbed from 6% to 46% over the same period—a signal that investors are underwriting the long-term treasury thesis rather than near-term accounting metrics.
From Passive Holding to Active DeFi Deployment
The fund represents a meaningful evolution in Sharplink’s treasury strategy. Until now, the company’s yield generation has primarily come from native Ethereum staking and restaking arrangements—most notably a $170 million deployment into a yield strategy on Consensys’ Linea network in January 2026, combining staking rewards with restaking through EigenCloud and incentives from Linea and ether.fi.
The Galaxy partnership pushes the strategy further into active DeFi participation, allocating to liquidity protocols and yield-generating applications. The structure is designed to let Sharplink preserve its core ETH exposure — the balance sheet asset that underpins its entire equity thesis — while putting that capital to productive use beyond passive staking.
“Sharplink’s strategy has always been to make our ETH maximally productive while upholding the highest standard of risk management,” said CEO Joseph Chalom. “By partnering with Galaxy to deploy a portion of our staked Ethereum treasury into institutional onchain yield strategies, we aim to compound our treasury while contributing to the deepening of the onchain financial ecosystem.”
Matthew Sheffield, Sharplink’s Chief Investment Officer, added that the fund is designed to “preserve our core staked Ethereum exposure while generating excess returns that accrues back to our shareholders.”
Galaxy’s Onchain Track Record
Galaxy brings significant credibility to the arrangement. The firm has been actively deploying hundreds of millions of dollars onchain since 2020 and is among the largest publicly traded companies actively allocating to onchain strategies. In June 2025, Galaxy closed a $175 million venture fund targeting early-stage investments in DeFi, stablecoins, and blockchain infrastructure—with early deployments into Monad and Ethena.
“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, Galaxy’s Founder and CEO. “Sharplink has built one of the most significant Ethereum treasuries among public companies, and we’re proud to partner with them to put that capital to work.”
Regulatory Tailwinds — and Scrutiny
The fund launches into a rapidly shifting regulatory environment for onchain yield products. Just three days ago, SEC Chair Paul Atkins flagged “crypto vaults”—on-chain applications that allow users to passively deploy digital assets into yield-generating strategies—as an area where the agency may need to provide clearer guidance on how federal securities laws apply.
The CLARITY Act, which is expected to receive a Senate Banking Committee markup as early as May 14, includes provisions that would establish a federal framework for how digital asset yield products are classified and regulated. The stablecoin yield compromise brokered on May 1 between Senators Tillis and Alsobrooks—which bans passive yield equivalent to bank deposit interest but protects activity-based rewards—could directly shape the regulatory environment in which funds like Galaxy-Sharplink operate.
A Nomura survey published in April found that nearly 80% of Japanese institutional investors plan to allocate 2–5% of AUM to crypto, with institutions increasingly pursuing yield strategies rather than simple token price appreciation—a trend the Galaxy-Sharplink fund is designed to capture.
