Sharplink’s Staking Income Grows, but Ether Still Drives the Risk

Staking generated $11.2 million of Sharplink’s revenue in the second quarter, a sharp change for a company whose Ether treasury can still move its reported results by hundreds of millions of dollars.

The Nasdaq-listed company, which held 888,938 ETH as of Aug. 3, reported $11.5 million in total second-quarter revenue, up from $697,000 a year earlier. But its net loss widened to $394.3 million. Sharplink attributed $321 million to unrealized losses on crypto assets and another $76.1 million to impairment charges on liquid-staking tokens. The unrealized loss was non-cash; the impairment reduced the recorded value of those tokens and, under U.S. accounting rules, cannot be reversed if prices later recover.

The yield strategy is meant to make the treasury productive while Sharplink waits out the market’s swings. On Aug. 13, the company said it would stake $200 million of ETH through Lido and receive wstETH, a liquid-staking token representing staked Ether and rewards, held in custody by Anchorage Digital. Sharplink said wstETH can also be used in decentralized-finance applications, potentially opening a route to additional yield.

That flexibility is not a price hedge. Staking rewards accrue in ETH terms, so a steep fall in Ether’s market value can overwhelm the income they generate. Nor does liquid staking erase the risks tied to protocol operations, custody or DeFi markets. Sharplink is adding ways to deploy its holdings, not separating its fortunes from the underlying asset.

A second initiative broadens the plan. Galaxy Digital and Sharplink launched a $125 million onchain-yield fund in August, with $100 million backed by Sharplink’s staked ETH treasury and $25 million from Galaxy. Galaxy manages the fund, which is designed to deploy capital across DeFi strategies and selected investments. That may diversify how some capital earns returns, but it also introduces exposures beyond straightforward staking.

The early revenue figures show the income engine is real. They do not yet show that it can absorb a crypto downturn. Sharplink’s second-quarter results capture the divide: staking helped lift revenue, while ETH-linked accounting charges dominated the bottom line. For shareholders, the central question is not simply how much yield the company earns, but whether it can grow that income without layering on risks that deepen the treasury’s volatility.