Sharplink Inc. will stake $200 million of its Ether holdings through Lido, a move that raises the question of whether active yield generation can offset the massive volatility embedded in its digital asset treasury model. The company reported this plan on August 13, shortly after releasing a second-quarter report showing a net loss of $394.3 million.
Sharplink will receive wstETH tokens, which represent staked ETH plus accumulated rewards, and will hold them in custody with Anchorage Digital. Lido manages roughly $16.5 billion in ETH, and its wstETH token serves as collateral in over $10 billion worth of positions across more than 100 decentralized finance applications. By using this liquid staking mechanism, Sharplink secures a claim on staking rewards without locking its ETH into illiquid forms, allowing for greater capital flexibility if market conditions shift.
The staking initiative builds on a second quarter where Sharplink's revenue surged to $11.5 million, up from $0.7 million in the same period a year earlier. This growth was driven by income from actively managed ETH holdings, which stood at approximately 886,881 ETH as of June 30 and grew to roughly 888,938 ETH by August 3. The company was also added to the Russell 2000 and Russell 3000 indexes during the June reconstitution, potentially broadening its investor base. Sharplink continued its share repurchase program, buying back about 2.1 million shares for roughly $10.0 million in the quarter, bringing total repurchases since August 2025 to approximately $41.7 million.
Despite the revenue increase, the bottom line remained heavily negative. The $394.3 million net loss was more than triple the $103.4 million loss reported in the prior year period. Of that total, $321.0 million consisted of unrealized losses tied to fluctuations in ETH prices during the quarter. Additionally, the company recorded a $76.1 million impairment charge on its LsETH and weETH holdings. Under GAAP accounting rules, this impairment remains on the balance sheet even if the tokens later recover in value.
Operational costs also rose significantly as Sharplink scaled its treasury management activities. Selling, general and administrative expenses increased to $9.1 million from $2.4 million a year earlier, reflecting higher costs for personnel, custody, insurance, and legal services associated with managing a multibillion-dollar crypto balance sheet. To fund its ETH purchases during the quarter, Sharplink conducted a $75.0 million stock and warrant offering priced at $7.49 per unit, a premium to net asset value.
Investor sentiment appears mixed as hedge fund ownership declined to 21 funds from 25 in the previous quarter. Meanwhile, short interest stands at 16.17% of the float, indicating substantial organized skepticism regarding the valuation of a company whose earnings are tightly linked to the price of a single volatile asset.