Galaxy Digital and Sharplink have announced a non-binding agreement to launch a $125 million institutional DeFi yield fund, designed to put Sharplink's massive Ethereum treasury to work. The fund aims to generate risk-managed, ETH-denominated returns by deploying capital across onchain liquidity strategies and supporting early-stage protocols.
Fund Structure and Participants
Under the terms of the agreement, Galaxy Digital will manage the fund and contribute $25 million, while Sharplink will commit $100 million. This marks a significant move of institutional capital into the DeFi space. Matthew Sheffield, Chief Investment Officer of Sharplink, stated that the company aims “to preserve our core staked Ethereum exposure while generating excess returns that accrue back to our shareholders.” Mike Novogratz, founder and CEO of Galaxy, highlighted the maturation of onchain infrastructure, noting that “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.”
Sharplink's ETH Holdings and Market Position
Sharplink now holds over 867,798 ETH (valued at approximately $1.72 billion), making it the second-largest public Ethereum treasury after Bitmine Inmersion, which holds over 5 million ETH. In Q1 2026, Sharplink earned 16,436 ETH from staking rewards, reported $12.1 million in total revenue, but also disclosed unrealized losses exceeding $685 million due to market conditions. Despite these headwinds, the company continues to expand its onchain exposure, with this fund representing a key component of its treasury management strategy.
A Turning Point for Institutional DeFi
The launch of this fund signals that decentralized finance has evolved from a retail-focused, low-liquidity niche into a mature industry suitable for institutional treasury diversification. Galaxy Digital will leverage its expertise to deploy capital, support early-stage protocols, and execute onchain liquidity strategies. While specific investment details remain sparse, the fund is designed with a long-term alignment in mind, focusing on generating ETH-denominated yield for investors. Both companies are optimistic that this initiative will pave the way for broader institutional adoption of DeFi.