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

In brief

• SharpLink Gaming staked $170 million worth of ETH on Ethereum layer-2 network, Linea.
• In October, the firm announced its intentions to stake up to $200 million on Linea to earn higher risk-adjusted yields.
• Shares of SBET rose 1.4% on Thursday but remain down nearly 37% in the last six months.

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.