Ethereum Treasury Firm SharpLink Stakes $170 Million of ETH on Linea

Publicly traded Ethereum treasury firm SharpLink Gaming has deployed $170 million worth of ETH to Ethereum layer-2 scaling network, Linea, the firm announced on Thursday. 

The Minneapolis, MN-based firm previously said that it would stake up to $200 million worth of Ethereum as part of a multi-year effort on the network as a way to optimize on-chain yields for its Ethereum holdings. 

“This deal allowed SharpLink to generate additional yield, in excess of its current staking rewards, while pushing the industry to embrace institutional-grade DeFi,” SharpLink CIO Matt Sheffield told Decrypt.

“A public company, deploying into liquid staking, then bridging, all without leaving a qualified custodian,” he added. “This was multiple industry firsts, and it is a milestone on our journey to make our treasury the most productive exposure to ETH.” 

Stockholders were privy to a gain of around 1.4% on Thursday, with shares of SBET changing hands at $10.28 at the close of trading. That mark is more than 33% below SBET’s level when the staking plan was announced in October. 

As the second-largest publicly traded Ethereum treasury firm, SharpLink maintains a treasury of 864,840 ETH valued at nearly $2.7 billion—all of which is staked via its custodians. With its recent deployment on Linea, it will gain re-staking rewards from Eigen Cloud as well as incentives from EtherFi and Linea, in addition to native ETH staking yields.

Though the firm would not disclose incentives on a deal-by-deal basis, Sheffield told Decrypt that the firm intends to “do many more deals of this nature, accretive to our stockholders, as we earn the excess DeFi yields.” 

In September, SharpLink CEO Joseph Chalom told Decrypt that it is important for the firm to drive real-world activity to “Ethereum-aligned” products like Linea given its interest in Ethereum’s success. 

But SharpLink is also a member of the Linea Consortium, a group of firms that help manage the distribution of the LINEA token. It also maintains another connection to Linea via Chairman Joseph Lubin, who co-founded Ethereum and is both a founder and CEO of Consensys, the software development firm that incubated Linea’s layer-2 network. 

(Disclaimer: Consensys is one of 22 investors in an editorially independent Decrypt). 

The layer-2 network launched its native token in September, and has since seen a steady decline in total value locked (TVL) on the network. According to data from DefiLlama, TVL peaked at $1.64 billion on the network around 2 weeks after the token launch. Since that time it has fallen around 89% to just $185.74 million. 

“This is just the beginning of making SharpLink’s ETH treasury resources even more productive for shareholders,” said Sheffield. “SharpLink is creating a new on-chain paradigm for capital markets. Our belief is that Ethereum will be the bedrock of global finance, and this is a big step toward modeling DeFi for institutions at scale on a risk-adjusted basis.”

ETH has fallen around 1% in the last 24 hours to change hands at $3,115. It remains 37% off its all-time high of $4,946.