SharpLink Will Explore Staking Portion of $3.6 Billion Ethereum Treasury on Linea, CEO Says

SharpLink Gaming plans to explore staking an undisclosed portion of its $3.6 billion Ethereum holdings on Ethereum layer-2 network Linea, once it hits mainnet on September 10.

Joseph Chalom, co-CEO of SharpLink, told Decrypt that the treasury company is currently staking almost the entirety of its holdings through its custodians, Anchorage and Coinbase. However, as the company matures, it will look to diversify the staking vehicles it utilizes as it seeks out higher-yield opportunities.

“When you hold billions of dollars of ETH and you’re looking at a portfolio of staking, there is going to be an ability to deploy that through staking opportunities on Linea,” Chalom told Decrypt. “And that is really, really important, not only to Consensys, but to the Linea Consortium. And if there are opportunities that SharpLink can avail itself of to get better yield, higher risk-adjusted yield through the Linea network, we will do that.”

“SharpLink has been staking our ETH after purchasing through a combination of native staking and liquid staking tokens,” he added. “As we expand our potential staking opportunities, we will be actively considering Linea-based staking opportunities.”

The co-CEO stressed the importance of driving real-world activity to “Ethereum-aligned” projects, Linea being one of those. He explained that by driving high-quality activity towards these kinds of projects, it should, in turn, also drive up the price of Ethereum—which is ultimately in the interest of SharpLink as one of the largest holders of ETH.

“When I say we’re here to support Ethereum, we’re here to support Ethereum and the L2s that derive from it,” he added. “So not only allocating tokens for Linea bootstrapping [as part of the Linea Consortium], but also [exploring] potential opportunities in staking and liquidity provision, given how much ETH we as a treasury want.”

Back in July, SharpLink joined the Linea Consortium—a group of companies that will steward 75% of the LINEA token distribution. Chalom said the Consortium is “mission-aligned” to make Linea a “highly successful” layer-2 network, adding that the token launch will “bootstrap” the network with more than 80% of the supply being used to support on-chain projects.

Consensys, the creator of Linea, is led by CEO Joe Lubin, who is also a co-founder of Ethereum and the chairman of SharpLink’s board of directors. As such, it’s only natural that Linea aims to support the Ethereum base layer through mechanics such as native yield on bridged ETH and ETH burns—a response to the narrative that layer-2 networks take value away from Ethereum’s mainnet.

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

That said, exactly how much Ethereum the firm bridges over to Linea and in what capacity it will be used to generate yield has yet to be confirmed.

“We are, at this point, trying to figure out what is the optimal portfolio of staking, beyond just vanilla, native staking through custodians,” Chalom explained. “We’re also investors and staking liquidity providers to Liquid Collective, which is a liquid staking token. There are ways to drive more of the delegation to participants on the Linea network, even through native staking as well as liquid staking.”

“It’s early days. I’m not really comfortable sharing exactly what the plans are, because we’re trying to figure out the entire portfolio of staking,” he added. “Remember: The number-one thing an ETH treasury is supposed to do is preserve its capital. The second is to have that capital appreciate, and the third is to go along the risk spectrum and drive yield.”

At the time of writing, SharpLink’s entire treasury of $3.6 billion worth of Ethereum—or approximately 0.69% of the total supply—is being staked with its custodians. However, the firm is on the precipice of diversifying where and how it is using its Ethereum.

“We’re at a pivotal moment in terms of opportunities to stake, and we want to do it in a way that really, really is diversified,” Chalom explained. “So I think what you’ll find is we’re going to walk before we run, but our goal is to drive the highest yields on a risk-adjusted basis for our investors.”