Key Takeaways
- • Galaxy Digital and Sharplink have partnered to launch the Galaxy Sharplink Onchain Yield Fund, a $125 million institutional DeFi fund expected to launch in the coming weeks, with Galaxy serving as exclusive manager.
- • Sharplink is committing $100 million from its staked Ethereum treasury and Galaxy is contributing $25 million, positioning this as a strategy to generate higher yields on idle crypto assets beyond traditional staking rewards (currently 2.5%-3.5% annually).
- • Sharplink, the second-largest Ethereum treasury company with $2.1 billion in assets and a $1.5 billion market capitalization, has generated $44.6 million in returns since its June 2025 launch, with CEO Joseph Chalom emphasizing the need to maximize ether productivity.
- • Galaxy Digital will manage protocol selection, position sizing, and risk management across DeFi platforms, allowing Sharplink to maintain core staked ETH exposure while deploying capital to active yield strategies.
- • The fund addresses a critical challenge for digital asset treasury companies: depressed crypto valuations have pressured returns, with Sharplink's mNAV currently at zero, intensifying pressure to generate alpha through alternative yield mechanisms.
Summary
Galaxy Digital, the New York-based crypto infrastructure and investment firm founded by billionaire Mike Novogratz, has partnered with Miami-based Sharplink to establish a $125 million institutional-grade decentralized finance fund. The Galaxy Sharplink Onchain Yield Fund represents a strategic pivot by digital asset treasury companies to generate enhanced returns through active DeFi protocol exposure, moving beyond passive staking yields that currently generate 2.5% to 3.5% annually.
The fund's capital structure consists of $100 million from Sharplink's staked Ethereum treasury and $25 million from Galaxy. Galaxy will serve as the exclusive investment manager, responsible for protocol selection, position sizing, and risk management across DeFi platforms including lending, trading, and yield aggregation products. Sharplink's $2.1 billion Ethereum treasury is currently fully staked across platforms such as Linea, Ether.fi, and Liquid Collective. The company ranks as the second-largest Ethereum treasury entity with a $1.5 billion market capitalization and has generated $44.6 million in cumulative returns since launching in June 2025.
The partnership addresses mounting pressures on digital asset treasury companies. Sagging cryptocurrency prices have depressed valuations across the sector, leaving Sharplink's mNAV—a key metric comparing market capitalization to underlying crypto holdings—at zero. Joseph Chalom, Sharplink's chief executive and former head of BlackRock's digital assets strategy, characterized the initiative as essential to the company's core mandate: "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." By deploying a portion of treasury assets into managed DeFi strategies while preserving core staked ETH exposure, Sharplink positions itself to capture alpha opportunities unavailable through passive staking alone.
The fund is expected to launch in the coming weeks and represents an institutional approach to blockchain-native yield generation, leveraging Galaxy's operational expertise in protocol evaluation and risk management. This structure allows treasury companies to maintain cryptocurrency exposure while accessing professional asset management within the decentralized finance ecosystem.
The fund's capital structure consists of $100 million from Sharplink's staked Ethereum treasury and $25 million from Galaxy. Galaxy will serve as the exclusive investment manager, responsible for protocol selection, position sizing, and risk management across DeFi platforms including lending, trading, and yield aggregation products. Sharplink's $2.1 billion Ethereum treasury is currently fully staked across platforms such as Linea, Ether.fi, and Liquid Collective. The company ranks as the second-largest Ethereum treasury entity with a $1.5 billion market capitalization and has generated $44.6 million in cumulative returns since launching in June 2025.
The partnership addresses mounting pressures on digital asset treasury companies. Sagging cryptocurrency prices have depressed valuations across the sector, leaving Sharplink's mNAV—a key metric comparing market capitalization to underlying crypto holdings—at zero. Joseph Chalom, Sharplink's chief executive and former head of BlackRock's digital assets strategy, characterized the initiative as essential to the company's core mandate: "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." By deploying a portion of treasury assets into managed DeFi strategies while preserving core staked ETH exposure, Sharplink positions itself to capture alpha opportunities unavailable through passive staking alone.
The fund is expected to launch in the coming weeks and represents an institutional approach to blockchain-native yield generation, leveraging Galaxy's operational expertise in protocol evaluation and risk management. This structure allows treasury companies to maintain cryptocurrency exposure while accessing professional asset management within the decentralized finance ecosystem.
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