Galaxy Digital and SharpLink Plan to Build Onchain Yield Fund
Galaxy Digital and SharpLink are preparing to launch a $125 million onchain yield fund, a move that could push corporate Ethereum treasury management further beyond simple buy-and-hold strategies.
The planned vehicle, called the Galaxy SharpLink Onchain Yield Fund, LP, is expected to deploy capital across decentralized finance liquidity protocols and other onchain yield-generating strategies. Galaxy Digital will serve as investment manager, while SharpLink will use a portion of its staked Ethereum treasury to seed the fund. The companies announced the plan on May 11, 2026, through a non-binding memorandum of understanding that remains subject to final documentation.
The commitments are expected to total $125 million, with $100 million coming from SharpLink’s staked ETH treasury and $25 million from Galaxy. The fund is planned to launch in the coming weeks.
For the crypto market, the announcement is more than another fund launch. It signals a growing shift in how public companies with digital asset treasuries are thinking about Ethereum. Instead of treating ETH only as a balance-sheet reserve, SharpLink is trying to make its holdings more productive through staking, liquid staking and institutional onchain yield strategies.
SharpLink Pushes Its ETH Treasury Into Active Management
SharpLink has positioned itself as an institutional-grade Ethereum treasury platform. The company says its strategy is built around giving public market investors exposure to ETH while seeking additional yield from the asset.
That approach has become central to SharpLink’s financial results. In its first-quarter 2026 update, the company said revenue rose to $12.1 million, compared with $0.7 million in the same period a year earlier. SharpLink said the increase was mainly driven by its actively managed ETH treasury strategy, which launched on June 2, 2025.
The company’s Ethereum holdings are now substantial. SharpLink reported approximately 870,821 ETH as of March 31, 2026, rising to 872,984 ETH as of May 4, 2026. It also said total staking rewards since June 2025 reached 18,800 ETH, including native and liquid staking programs.
From Passive Holding to Onchain Yield
The fund marks a deeper move into active crypto treasury management. SharpLink said it has already transitioned most of its ETH treasury management in-house, while using its institutional team to find ETH productivity opportunities that could enhance long-term ETH per share.
This is where Galaxy Digital enters the picture. Galaxy is expected to handle protocol selection, exposure sizing and monitoring under its institutional research and risk-management framework. The companies said the strategy is designed to let SharpLink preserve its core Ethereum exposure while putting balance-sheet capital to work in blockchain-based financial markets.
In plain terms, SharpLink is not trying to sell its ETH to chase yield elsewhere. It is looking for ways to earn additional ETH-denominated returns while staying tied to Ethereum’s long-term growth story.
Why Galaxy Digital’s Role Matters
Galaxy Digital has built its business around institutional digital assets, including trading, asset management, staking, self-custody and tokenization services. The company also said it has been deploying hundreds of millions of dollars onchain since 2020.
That experience matters because onchain yield is not the same as traditional fixed income. DeFi strategies can involve smart contracts, liquidity pools, lending protocols, asset wrapping, bridges, liquid staking tokens and changing market incentives. These tools may generate attractive returns, but they can also introduce operational, liquidity, counterparty and protocol risks.
Galaxy’s job will be to turn those opportunities into an institutional strategy with defined research, risk controls and ongoing monitoring. If successful, the fund could become a model for other corporate crypto treasuries that want more than passive exposure.
Ethereum Staking Remains the Foundation
Ethereum staking is already a key part of SharpLink’s business model. On Ethereum, staking involves depositing ETH to run validator software, help process transactions, store data and add new blocks to the network. Validators earn ETH rewards for performing these duties correctly.
For treasury companies, staking offers a native way to earn ETH-denominated returns. But staking alone may not satisfy firms trying to maximize balance-sheet productivity. That is why some investors are now looking at broader onchain yield strategies, including lending, liquidity provision and structured DeFi opportunities.
The Appeal of ETH-Denominated Returns
The most important detail is that SharpLink appears focused on growing its ETH base, not simply earning dollar yield. That difference matters. A company that views Ethereum as its core treasury asset may measure success by how much ETH it can accumulate per share over time.
SharpLink said its ETH per share metric, also called ETH concentration, has more than doubled since the start of its Ethereum treasury strategy, rising from 2.0 to 4.02.
That metric is likely to become more important as investors evaluate public companies built around crypto treasuries. For Bitcoin treasury firms, the market often focuses on bitcoin per share. For Ethereum treasury firms, ETH per share and staking productivity may play a similar role.
Q1 Loss Shows the Volatility Behind the Strategy
The announcement arrived alongside a complicated earnings update. SharpLink reported a net loss of $685.6 million for the first quarter of 2026, compared with a $1.0 million loss in the prior-year period. The company said the loss was mainly driven by non-cash unrealized losses and impairments tied to ETH market conditions, including a $506.7 million unrealized loss and a $191.7 million impairment charge.
SharpLink also said those accounting charges did not represent realized economic losses on its ETH holdings and did not reduce the number of ETH it held.
That distinction is important for investors. Crypto treasury companies can show large swings in reported earnings because accounting rules reflect changes in the market value of digital assets. Even if a company does not sell its ETH, a decline in market price can still produce significant paper losses in financial statements.
The Risks of Institutional Onchain Yield
The planned fund is ambitious, but it is not risk-free. In its own forward-looking disclosures, Galaxy listed risks tied to DeFi protocols, including smart contract vulnerabilities, protocol failures, liquidity risks, impermanent loss, governance risks, regulatory uncertainty and possible total loss of capital deployed onchain.
That warning should not be overlooked. DeFi can offer yield because it supplies liquidity, takes protocol risk or participates in markets where capital is still relatively scarce. Those returns are not the same as bank interest or Treasury yields.
For institutions, the challenge is finding a balance. They want access to onchain markets, but they also need controls that shareholders, auditors and regulators can understand. Galaxy and SharpLink are effectively testing whether an Ethereum treasury can move into DeFi without looking reckless.
What This Means for Crypto Treasury Management
The Galaxy-SharpLink fund could become a visible example of the next phase of digital asset treasury strategy. The first phase was corporate crypto accumulation. The second phase was staking and basic yield. The next phase may be professionally managed onchain capital allocation.
If the model works, other public companies with ETH holdings may consider similar structures. They may not copy the strategy exactly, but they could begin asking the same question: should an Ethereum treasury sit idle, stake passively, or actively participate in decentralized finance?
For Ethereum, the answer matters. Institutional participation could bring deeper liquidity to DeFi protocols, more demand for professional risk tools and greater attention to the quality of onchain infrastructure.
A Bigger Test for Institutional DeFi
The planned $125 million fund is still subject to definitive agreements, so investors should treat it as a proposed launch rather than a completed product. But the direction is clear. Galaxy Digital and SharpLink are trying to bring public-company capital into onchain finance with a more formal institutional framework.
That could be a meaningful step for Ethereum treasury management, institutional DeFi and crypto yield strategies. It also raises the bar. In a market still shaped by volatility and smart contract risk, simply earning yield is not enough. The real test is whether that yield can be generated consistently, transparently and with discipline.
For now, SharpLink’s message is direct: Ethereum does not have to be a passive treasury asset. With the right structure, it can become productive capital.