Sharplink Gaming Inc Aktie

Good morning everyone and thank you for participating in today's conference call to discuss Sharplink's Financial and Operating Results for the Second Quarter ended June 30th, 2026. By now everyone should have access to the second quarter 2026 earnings press release which was issued this morning at approximately 8:00 a.m. Eastern Time.

The release is available in the Investor Relations section of Sharplink's website. This call will also be available for webcast replay on the Sharplink's website. Following management's prepared remarks, we will open the call for questions. I will now hand the call over to Sharplink's Vice President of Business and Legal Affairs, Dodi Handy, for introductory comments.

Thank you, Operator. Please see Sharplink's quarterly report on Form 10-Q filed on Friday, August 7, 2026 with the SEC, along with the earnings press release that crossed the wire this morning. These documents list some of the factors that may cause the results of Sharplink to differ materially from what we say today and identify some of the risks and uncertainties that could affect our business, prospects, and future results.

Sharplink assumes no duty and does not undertake to update any forward-looking statements. Any forward-looking statement made by us during this call is based only on information currently available to us and speaks only as of the date when it is made.

In addition, we may be discussing or providing certain metrics today, such as ETH per share and other treasury-related performance metrics that are not GAAP measures. Please see our earnings press release and SEC filings for further information regarding these metrics. To set the agenda for today's call, we will begin with Joe Lubin, Sharplink's Chairman of the Board, co-founder of Ethereum, and Founder and CEO of Consensys.

Joe will discuss Ethereum's evolution into foundational infrastructure for programmable financial and economic activity, including networks technological roadmap, expanding institutional adoption, and an ecosystem that grows increasingly capable of supporting global finance at scale.

Next Sharplink's Chief Executive Officer, Joseph Chalom, will discuss the Ethereum institutional super cycle, Sharplink's ecosystem initiatives, recent capital allocation activity, and how Sharplink is putting its ETH treasury to work through staking and active treasury management.

Finally, our Chief Financial Officer, Bob DeLucia, will recap Sharplink's second quarter financial results, liquidity position, and key ETH Treasury performance metrics. At this time, I'd like to turn the call over to Sharplink's Chairman of the Board, Joseph Lubin. Joe, the floor is yours.

Thank you, Dodi, and good morning, everyone. As a co-founder of Ethereum and CEO of Consensys, I have had the privilege of helping build the ecosystem from its earliest days. For much of the first decade, Ethereum was often evaluated through the narrow lens of diverse waves of innovation, crypto market cycles, and short-term asset prices.

Those forces remain visible, but they are increasingly incomplete measures of the progress taking place visibly and beneath the surface. Ethereum is transitioning from technology once viewed as experimental into core infrastructure for programmable financial and economic activity.

Stablecoins, tokenized assets, decentralized markets, and automated commerce are operating today, settling meaningful value and attracting increasingly sophisticated users, human, corporate, and machine.

It's clear that this market is unique compared to others. Ethereum now benefits from more mature custody, security, and compliance infrastructure, deeper institutional expertise and a more constructive regulatory framework.

Major financial and technology companies are moving beyond proof-of-concept projects towards production systems. Technological adoption, regulatory development, and asset prices will not always move on the same timeline. But the direction of travel is increasingly clear.

Ethereum is foundational infrastructure for the programmable global economy. Many factors and stakeholders are increasingly aligning around this inevitable outcome. The momentum is not exclusively top-down. Alongside accelerating institutional participation, we are seeing renewed excitement and engagement from retail users, developers, and entrepreneurs.

Institutional adoption brings scale, capital, and credibility, while grassroots participation continues to drive experimentation, applications, and community growth. Together, they reinforce our belief that we are entering a new Ethereum era, supported by broad-based conviction rather than any single category of participant.

The Ethereum economy is becoming an increasingly intrinsic part of the diverse global economy. Ethereum's defining advantage is a credibly neutral, censorship resistant, programmable infrastructure that is guaranteed to execute properly formed transactions or programs.

It enables institutions and other participants to transact and coordinate through automated transparent rules without surrendering control to a single commercial intermediary, thus eliminating or reducing exposure to counterparty risk and other forms of risk.

The Ethereum Foundation has described this as shared, neutral digital infrastructure for governments, institutions and communities. It's applications extend beyond payments to asset issuance, trade settlement, identity registries, attestations and tokenized markets.

Over time, we expect ETH's value proposition to become increasingly aligned with the amount, quality, and strategic importance of activity across the network. Robinhood's decision to build its blockchain infrastructure on Ethereum is one recent proof point. In its Q2 results, Robinhood described Robinhood Chain as a Permissionless AI native financial grade Ethereum Layer 2 blockchain built to institutional standards. A platform with 28 million customers and $369 billion in assets, choosing Ethereum Rails for its next generation of products.

The institutions that hold the world's assets are moving in the same direction. Just last week, BlackRock, the world's largest asset manager, expanded its tokenized cash platform with new products built on Ethereum.

Building on the continued growth of its BUIDL fund. JPMorgan, a bank whose CEO once publicly dismissed digital assets, has also deepened its Ethereum footprint, filing for a second tokenized money market fund on the network. And expanding institutional use of its JPM coin deposit token on the Ethereum base network.

The Ethereum ecosystem is also evolving to support this next stage of adoption. Ethereum Foundation continues to play an essential role in protecting the protocol's core properties and long-term resilience, while additional specialized steward organizations are emerging to add focus and execution across important areas of the ecosystem. We are supporting that evolution directly through investment in ETH Labs, Ethereum Institutional, and EthSystems, which Joseph will discuss in greater detail.

These organizations are designed to address protocol development, institutional engagement and privacy infrastructure while preserving the independence and credible neutrality that differentiates Ethereum from other blockchain ecosystems. This diversification of specialized steward organizations will greatly strengthen, accelerate and broaden the Ethereum ecosystem.

The protocol roadmap is advancing in parallel. The upcoming Glamsterdam hard fork marks the first concrete step in the broader lean Ethereum roadmap that Vitalik recently outlined. A 3 to 4 year effort to rebuild Ethereum's core around lean consensus, lean data, and lean execution.

Its two headline changes, ePBS, enshrined proposer-builder separation, and BAL, block-level access lists, provide the technical foundation for subsequent upgrades, including the next hard fork, Hegota. For institutions, the significance is that Glamsterdam is not a one-off upgrade, but the next major move in a multi-year evolution towards a much faster, more private and quantum resistant Ethereum, with capacity and performance improvements expected to powerfully compound across each successive fork.

Ethereum's first decade proved the technology. The next will be defined by its adoption at massive scale as the network moves rapidly from experimentation to real-world implementation. That transition has significant implications for the company's positions to participate in Ethereum's growth. That is why we, are building Sharplink to be an active participant in this new Ethereum era.

Our objective is to provide public market investors with disciplined, productive exposure to Ethereum's long-term growth while supporting the ecosystem that underpins our treasury asset, Ether.

As Ethereum's role in the global economy expands, we intend for Sharplink to grow alongside it. I would now like to turn the call over to Sharplink's Chief Executive Officer, Joseph Chalom, to discuss how Sharplink is putting that strategy into place. Joseph?

Thank you, Joe, and good morning, everyone. Thank you for joining us. Joe briefly described the new Ethereum era taking shape. From my perspective, we are well underway in the institutional super cycle. This new era is a crucial part of making sure the network is ready for the coming of the new era demand. Importantly, we're not just observing this new era take shape, we're actively building it.

We deploy ETH capital back into the ecosystem through staking, our DeFi deployments, and the Galaxy Sharplink Onchain Yield Fund. We're also funding new institutions to accelerate institutional adoption, including ETH Labs, Ethereum Institutional, and EthSystems, which I will go into more detail on later in my remarks.

We are proud to be one of Ethereum's most active stewards and have taken a deliberate approach to building relationships, supporting critical infrastructure, and creating new ways to make our ETH productive. We are genuinely energized by the momentum we're seeing and the caliber of engagement it's generating.

We believe our efforts have helped shift the narrative on Ethereum from one defined by short-term price swings to one grounded in long-term value creation, reinforcing our conviction that this is the moment to lead with the discipline and ambition this Ethereum opportunity deserves.

This turnaround reflects real work by real people. Joe Lubin, myself, Tom Lee of Bitmine, and a number of other ecosystem stakeholders have been actively investing directly in Ethereum's infrastructure. We are telling its story more effectively than we have in the past, and it's working. Sentiment has turned very positive. Ethereum is winning. During the month of July, ETH appreciated 22% compared to 11% for Bitcoin, while Solana declined 5%.

That price performance is being matched by capital flows. According to Blockworks, U.S. spot Ethereum ETFs pulled in approximately $349 million in net inflows in July, outpacing Bitcoin's ETFs at roughly $281 million and Solana ETFs at approximately $25 million over the same period.

Short-term asset prices do remain volatile, but ETH's price performance and the capital flowing in are signals reinforcing our belief that a new Ethereum era is taking shape along alongside continued progress across institutional adoption, network development, and on-chain activity.

We spent the last year building for this exact environment. This past June marked our first anniversary since launching our Ethereum treasury strategy. In that time, we raised over $3.3 billion in capital and became the world's second largest corporate holder of ETH. We recruited a world-class team spanning traditional finance and digital assets expertise.

We have been among the most active companies putting that ETH to work, establishing institutional custody and staking infrastructure to make our treasury productive from day one. Just as importantly, we've built a culture of institutional risk management and governance from the outset, which has kept us disciplined and resilient through a volatile crypto cycle.

The market is validating the institutional character of the platform we have built. As part of the Russell Index June 2026 reconstitution, Sharplink was added to the Russell 2000 and the Russell 3000 indices. According to FTSE Russell, approximately $12.2 trillion in assets are benchmarked against Russell U.S. indices.

We view our inclusion as an important milestone that broadens institutional visibility and eligibility for index-linked ownership, providing external validation of Sharplink's scale, liquidity, and strategy. I now want to turn to capital allocation.

We have been consistent from day one about our framework to compound ETH per share and grow net ETH over time. We pursue those objectives through two complementary engines. The first is disciplined public market capital allocation, including issuing equity when terms are attractive and accretive, purchasing ETH when doing so improves long-term shareholder economics, and repurchasing Sharplink shares when they trade below our assessment of its intrinsic value.

We demonstrated that optionality during the second quarter. On June 23, 2026, we completed a $75 million registered direct offering, issuing roughly 10 million shares and accompanying warrants at a combined purchase price of $7.49 per share and warrant. Importantly, the transaction was completed at a premium to Sharplink's net asset value, providing capital on attractive terms.

We used a portion of that capital to acquire approximately 10,000 ETH at an average price of approximately $1,611 per ETH.

We also purchased 2.1 million shares during Q2 at an average price of approximately $4.70 per share for an aggregate purchase price of approximately $10 million. Since initiating our repurchase activity in August 2025, we have repurchased purchased approximately 4 million shares at an aggregate cost of approximately $41.7 million.

Together, these actions show how we can raise capital on attractive terms, acquire ETH during market dislocations, and repurchase shares when our equity is undervalued. All in support of long-term shareholder value. The second engine is treasury productivity.

We stake and selectively deploy our ETH to earn incremental returns above the composite Ethereum staking rate, or CESR, a market benchmark for the average annualized yield earned by Ethereum validators. Our most recent example of this was our announcement of the Galaxy Sharplink On-Chain Yield Fund.

The fund has $125 million in committed capital, including $100 million from Sharplink and $25 million from Galaxy Digital.

Sharplink will fund its investment through a contribution of ETH or liquid-staked ETH. We're very excited to share that the initial investment opportunities have already been identified. Actual deployment timing will depend on finalizing those opportunities in line with the fund's risk and return standards.

We are actively evaluating additional productivity strategies, including other funds, on-chain vaults, direct deployments, and structured ecosystem opportunities. Inbound demand has been strong, but access alone is not a reason to deploy capital. We proceed only when the expected incremental ETH return appropriately compensate shareholders for the risk, liquidity profile, and operating burden.

That productivity mindset extends beyond our own balance sheet. Our scale, market presence, and connectivity also enable us to serve as an institutional steward of the Ethereum ecosystem. As I mentioned earlier, we provided anchor funding to ETH Labs, Ethereum Institutional, and EthSystems, three organizations we believe are already generating real momentum and driving the next stage of Ethereum's institutional development. These three independent organizations serve different functions. First, ETH Labs, founded by former senior Ethereum Foundation contributors, is focused on advancing the core protocol, scaling, ecosystem growth, usability, and interoperability.

Its work is designed to prepare Ethereum for the next wave of institutional DeFi and agentic finance adoption, while reinforcing the network's credible neutrality, security, and resilience. Second, Ethereum Institutional serves as a dedicated institutional front door and help desk to the Ethereum ecosystem, assisting banks, asset managers, custodians, and market infrastructure providers move from evaluation to deployment.

The organization has built more than 500 institutional relationships and convened over 150 senior executives representing approximately $250 trillion in combined assets. Third, EthSystems is an engineering and research company founded by the team behind the Ethereum Foundation's Institutional Privacy Task Force.

It is building privacy and compliance infrastructure that enables banks, asset managers, and other regulated institutions to transact on Ethereum at scale without exposing sensitive information such as trade details or client identity. Together, these organizations serve as three coordinated accelerants of adoption for protocol scalability, institutional engagement, and privacy for regulated financial activity.

I am pleased to serve on the board of Ethereum Institutional, where my experience across asset management and financial market infrastructure can help traditional organizations understand how Ethereum is uniquely suited to fit their business needs. We believe stronger protocol, institutional participation, and privacy infrastructure can accelerate Ethereum adoption and strengthen the ecosystem underlying and powered by the ETH on our balance sheet.

The growing market engagement around these initiatives reinforces our conviction that investors are increasingly recognizing Ethereum's institutional opportunity.

The opportunity set is expanding alongside Ethereum itself. The network has the deepest developer base in the blockchain sector and hosts more than half of global stablecoin supply. The majority of tokenized real-world assets and approximately approximately 62% of DeFi total value locked.

That depth of activity creates liquidity, resilience, and an innovation base that is difficult to replicate. One of the most important emerging categories is agentic finance. As AI agents increasingly make purchases, manage financial positions, and transact with other agents, they will require programmable money, verifiable identities, enforceable rules, and permissionless settlement infrastructures.

Early indicators are already meaningful. Based on the last 30 days, Coinbase's x402 protocol is showing a run rate of approximately 225 million payment transactions across tens of thousands of active agents.

While still early, this activity demonstrates that autonomous software agents are beginning to participate directly in economic activity and should increase demand for stablecoins, collateral, smart contract execution, and secure verifiable settlement. In summary, we have built scale, and now we are putting that scale to work.

We are allocating capital dynamically, combining foundational staking with selective active return strategies. We are supporting infrastructure that strengthens Ethereum and evaluating additional ways to use our operating platform to generate long-term shareholder value.

We are relentlessly focused on our North Star, compound ETH per share and net ETH earned over time through disciplined capital allocation, productive treasury management, and rigorous risk controls. We have also taken a proactive strategic role in telling the Ethereum story alongside a broader community of stakeholders and we believe that work has helped turn the tide on how the market perceives the Ethereum opportunity.

We intend to keep showing up not just as one of Ethereum's largest holders but as one of the most active champions. With that, I'll turn the call over to our Chief Financial Officer, Bob DeLucia, to review our second quarter financial results.

Bob?

Thank you, Joseph. I'll begin by encouraging everyone to review our quarterly report on Form 10-Q for the period ended June 30, 2026, which we filed on Friday, August 7, 2026, with the SEC. The 10-Q provides detailed disclosures and footnotes that complement today's discussions, offering stockholders, analysts, and investors a comprehensive view of Sharplink's financial position, liquidity, and its ETH Treasury performance.

We will now go through the financial results for the quarter ended June 30, 2026. I'd like to remind everyone that all comparisons and variance commentary refer to the prior year quarter unless otherwise specified. As of June 30, 2026, Sharplink held 632,784 native ETH with a net fair value of $989 million. In addition, we held 162,083 of LsETH or Liquid Staked ETH and 66,267 of weETH or wrapped ether.fi ETH. With a combined net cost value of $369.2 million.

Subsequent to quarter end, our combined ETH holdings have increased to 634,255 native ETH, 181,748 as-if-redeemed LsETHs, and 72,935 as-if-redeemed weETH for a total of 888,938 ETH as of Monday, August 3rd, 2026.

Total revenue for the quarter ended June 30, 2026, was $11.5 million compared with $0.7 million for the quarter ended June 30th, 2025. The increase was driven by our staking and ETH yield generating strategies. We recorded a net realized gain of $1.4 million compared with a $5.4 million realized gain in the prior year quarter.

The gain in the current quarter was due to the derecognition of LsETH. We also recorded an unrealized loss of $321 million compared with a $2.4 million unrealized loss in Q2 of 2025. We also recorded an impairment charge of $76.1 million compared with a $87.8 million charge in the prior year quarter. SG&A expenses in the second quarter were $9.1 million compared with $2.4 million in the prior year quarter.

The increase reflects our ETH treasury strategy operating for a full quarter in 2026 versus only a partial period following its launch in early June 2025. The additional expenses included personnel, custody, insurance, legal, accounting, and other public company infrastructure costs.

For the second quarter of 2026, we reported a net loss of $394.3 million compared to a net loss of $103.4 million in the prior year. The Q2, 2026 results were driven primarily by the previously discussed unrealized fair value loss of $321 million and an impairment charge of $76.1 million, which was partially offset by the $1.4 million of realized gains.

Overall, our second quarter performance reflects the broad decline in crypto asset prices experienced across the market during the quarter. As we noted previously, the impairment charges and unrealized losses recorded this quarter reflect current market pricing dynamics and the accounting requirements of U.S. GAAP. These accounting measures do not represent realized economic losses on our ETH position, nor do they impact the number of ETH units we hold.

Our Treasury strategy continues to be evaluated on discipline, ETH accumulation, and long-term productivity of those assets over time. As of June 30, 2026, cash on hand was $56.2 million compared to cash on hand of $28.5 million as of December 31, 2025. Between our cash position, our unencumbered ETH holdings, and the flexibility of our capital allocation framework.

We believe Sharplink maintains ample liquidity going forward to execute on its strategy across a range of market conditions and opportunities. For additional details, our complete financial statements and accompanying footnotes, including all required disclosures and management's MD&A analysis, are contained in our quarterly report on Form 10-Q for the period ended June 30, 2026, filed with the SEC. This concludes our prepared remarks. We will now open it up for questions from those participating on the call. Operator, back to you.

[Operator Instructions] Our first questions come from the line of Devin Ryan with Citizens Bank.

Please proceed with your questions.

Thanks so much. Good morning, Joe, Joseph, and Bob. I want to start with a question on the agentic opportunity, obviously, tracking a lot of activity. I think I just read somewhere where in recent months, the majority of traffic on the internet is now non-human. So AI agents are obviously scaling pretty rapidly, but we're also early days. So I'd love to just hear a little bit more about how you all see that playing out on blockchain.

I know you mentioned stablecoins, we're seeing good activity there, but just kind of the evolution with agents from where we are now, do they care which chain they use? Why is Ethereum well-suited? How much share can Ethereum win? And then just more broadly, what Sharplink is doing to position for that opportunity. I know ETH Labs is maybe one example, but just love to hear a little bit more about how you're thinking about the opportunity.

Good morning, Devin. Great question. It's one actually that gets me quite excited. So I want to set the context. Agentic finance and commerce is really about giving individuals and their agents, some people will refer to them as digital twins, something that only institutions have ever had before.

An individual, you could say, in the future is going to have a treasury desk or a CFO in their pocket. And for listeners, every large asset manager employs people whose job it is to make sure that no dollar sits in a portfolio idle. Every security is being lent or borrowed to earn yield. Every share gets voted. And most individuals globally have never had access to that.

And so an autonomous agent with the will of an individual is what's going to make that possible. Think of it as always on autonomously executing your preferences at basically zero marginal cost with massive scale. And the gap that it's going to close for retail investors is actually enormous.

American households, the last time we checked, hold around $6 trillion in checking accounts, around $15 trillion if you count savings account. Most of it is earning a fraction of prevailing market rates. And that's not a problem with the banks or a product problem. It's actually a labor and intentionality problem.

No one's going to manually sweep their cash every night and rebalance their portfolios and lend their stocks, but agents and software can and will. And your second point about why Ethereum, it's really for two reasons. There's an open source protocol called x402. You can think of it as a micropayments capability that lets agents pay one another in stablecoins on Ethereum without asking a card network or a proprietary permission network for any permissions. And that is already crossing hundreds of millions in transactions.

On top of that open source micropayments network and protocol, you have Ethereum's ERC-8004. It actually gives agents guide rails and a registry so that they can establish identity and trust with no intermediary sitting in between.

Nobody has to convene a consortium to make that happen. It's live, it's shipped, and Ethereum is already leading the agentic finance underlying infrastructure.

The second element is I think the underrated part. Neutrality is a financial feature, not an ideological one and not a product defect. Look at who's racing to own these rails. Stripe did about $1.9 trillion in payments last year, launched its own online chain. Visa, Mastercard, Google, all shipping agent payment standards.

These are really good company, but if your rails and your agent are owned by a payments company, they're the ones who are going to decide what yield your product gets swept into, what products they recommend, and will take a fee along the way. Ethereum is the only architecture where no one sits in that seat in between agents and users.

It's had a decade of uptime. It has no individual owner or concentrated foundation. Nobody can change the rules underneath you. And so the way I'll put it is, if the rails are proprietary, that agent in your pocket will answer to whoever built it. If they're neutral and Ethereum is the lead leading chain in terms of maturity, liquidity, trust.

Your agents will essentially answer to you. So we believe very strongly the stablecoin layer is dominated on Ethereum and their layer twos, the tokenized asset rails and DeFi. And we believe the agentic layer will just automate that activity largely on Sharplink, largely on Ethereum.

There are so many aspects to agentic activity on decentralized rails. I'll keep it fairly simple. As you suggested, autonomous AIs are going to want the best infrastructure that smart companies will choose and that's a credibly neutral guarantee to execute risk minimized.

All right and so that is Ethereum, it can't be layer twos on Ethereum that didn't inherit the security guarantees of layer one on Ethereum. If you think about DeFi, in a sense, blockchain and DeFi were not made for the bulk of humanity to interact with directly. Sort of similar to the evolution of the automobile.

So it's complex machine, mechanical and electronic, and it has been protected by engineers so that with the use of automated transmission and in full self-driving even, people are able to wield this incredibly complex and even dangerous technology relatively effortlessly. And so you can imagine that the engineers, researchers of Ethereum and DeFi systems are putting together essentially the automated transmission and the full self-driving of finance.

And you'll see that as agents and the enable all the heavy lifting and all the automated activities that make sure that your money is always working for you and is safe. In particular my favorite wallet MetaMask has a system that does exactly that.

Really fascinating. Appreciate the responses, Joseph and Joe. A follow-up here, kind of maybe say big picture, a little bit over a year into the Treasury strategy, so maybe a good time to revisit kind of big picture on why Treasury versus passive ownership. And I think, you know, it's obviously been a volatile backdrop for prices.

And I think that can obscure kind of the value sometimes at least optically from the value created by active management. So we would love to hear in your words kind of how you would frame Sharplink's treasury performance relative to passive ETH ownership as an alternative.

And then just looking ahead, I suspect maybe one of the silver linings to a difficult price backdrop is just there's less capital chasing opportunities. And so if you can just maybe add some context on maybe how much incremental yield you think you've kind of stacked for the future, if you will, or just been able to kind of negotiate ahead of the next phase of the adoption cycle, obviously, we see all these partnerships. And so it seems like the firms you're probably getting today would be better than when things were really hot from a price perspective. I'd love some context there.

Sure. So, Devin, owning Sharplink instead of simply buying ETH in the spot market or an ETF is kind of a fundamental investment question. Owning ETH directly provides exposure to the asset, and our objective is actually to provide exposure to both the asset and additional value we can create uniquely through disciplined institutional capital allocation.

We believe that we can create value beyond just passive ownership through three basic capabilities that, when combined, are compounding. The first is just disciplined capital allocation. We raise capital when attractive, we can repurchase shares when appropriate, and we are continuously evaluating how to maximize ETH per share.

Second is our treasury management is productive.

Rather than simply holding ETH or staking part of it, we're actively putting our treasury to work through both staking and carefully selected institutional strategies that take advantage of, frankly, our comparative advantage, which is having permanent capital.

Many funds and ETFs cannot do that. They have to provide daily liquidity. They cannot do virtually anything beyond staking and our goal is to earn incremental ETH over time in a way that an ETF cannot, or most users holding spot cannot either. And the third is we provide access to ecosystem participation.

We are helping build the infrastructure that we believe will accelerate Ethereum's long-term adoption while having access to differentiated investment opportunities for our shareholders.

And I really want to emphasize that. The deal flow that is coming to us is tremendous. I think in the last several quarters, we saw over 100 opportunities. We diligenced only about 12 of them, and you've seen the deployments we're making. So if we execute well and we're doing it in a very disciplined fashion, investors aren't simply buying ETH exposure.

They're investing in a company who has a mission to compound that value through active institutional grade management. So I think it is highly differentiated and you will see over time that our competitive advantage of scale, liquidity, a public wrapper, and permanent capital will actually give us opportunities not to chase yield, but essentially to be rewarded for deploying in the long run and for long term.

So Devin, thanks for those questions.

Our next questions come from the line of Fedor Shabalin with B. Riley Securities. Please proceed with your questions.

Thank you very much, operator, and good morning, everyone. Mike, it was a great discussion from Devin and your answers, but my question is less, like I said, more granular, less strategic. First one is on the $125 million fund with Galaxy. Do you have like a mini target return profile and risk budget, maybe split between DeFi lending and liquid stake yield versus more structured exposure? And how does capital in the fund interact with the core Ethereum treasury? Is this being redeployed out of existing ETH holdings or funded somehow separately. Thank you very much.

Fador, great question. So we aren't going to actively disclose yield guidance. You can think of it as our success in this fund as another sleeve in a portfolio is going to be measured by long-term risk-adjusted incremental ETH earned above the native staking rate.

So again, incremental ETH returns above the native staking rate. We are capitalizing the fund with ETH. So we are continuing to get staking rewards on the ETH we deploy. The fund will borrow against that to do deployments. I believe most of the deployments are going to be on-chain, highly collateralized yield opportunities.

I don't believe this is going to be another sleeve of liquid staking or restaking. We're going to commit to support the cold start problem we've talked about in the past, which is new protocols needing to have a solid base of capital on which they can attract additional capital. And if you do that right, you will end up getting better returns for your investors while still staying directionally exposed to ETH.

We chose Galaxy in this format because they have capabilities to do even greater sourcing at scale, diligence at a level that as a public company with years of experience, very few institutions have, and importantly, a risk management framework that we've agreed with them to continue to monitor these investments and to adjust them in real time as needed.

We can do these deployments 1, 2, 3 at a time. They're going to do this deployment in much more scale. So for the day-to-day management of our portfolio, the strategic allocations, we've built the strongest in-house team and capability, but for specialized deployments in scale, we'll benefit from the value and the partnership with Galaxy.

So again, we're not providing yield guidance, but we are seeking to outperform the long-term incremental ETH we can earn above the native CESR staking rate.

Thank you very much for this. And my follow up is, if you can talk a little bit more in details about funding to ETH Labs, Ethereum Institutional and EthSystems and an expected duration of this. Is this kind of a short-term granting or ongoing annual commitment? And does it come out of treasury, ETH or cash and what would be expected, call it payback for SBET shareholders specifically? Is the thesis that this drives broad ETH price appreciation, which every ETH holder benefits from, or does Sharplink get kind of differentiated commercial access maybe early access to institutional flow through ETH traditional relationship or kind of privacy infrastructure from EthSystems. So that kind of other treasury vehicles don't get.

Sure. I think you should think of these as a very, very intentional and strategic allocation. They're intended to strengthen the overall infrastructure that supports our thesis, which is long-term Ethereum adoption by the world's largest institutions. These institutions who've spun off from the Ethereum Foundation needed longer-term funding, and we're supporting them not through charity or philanthropy. We're making 1, 2 multi-year funding commitments alongside the ecosystem, including Joe Lubin personally, Tom Lee at Bitmine, and in some of the cases, over 100 distinct anchor and additional supporters.

They are fully economically aligned with what our shareholders expect because a stronger Ethereum ecosystem and narrative and storytelling and infrastructure can enhance long-term utility and the value proposition of ETH. Again, this is a strategic support investment, not philanthropy.

Our treasury strategy continues to remain focused on increasing ETH per share, and these ecosystem investments are a complementary way to help accelerate that adoption and the drivers that underpin our entire strategy.

They don't provide us with any unique capability, profit sharing. They're meant to be run as independent, neutral companies. That is the beauty and the benefit of Ethereum. We are not controllers of these companies. That said, we'll have voices along with other ecosystem participants and their objectives are going to be public, they're going to be open source, and they're going to be fully auditable. And so we'll have much more visibility into what they're doing but also opportunities that's spin out from these institutional adoption capabilities, and it'll be very accretive, we believe, in the long run for our shareholders.

You've already seen the sentiment shift from earlier this summer around Ethereum Foundation, some of the subtraction they were doing by getting more focused. And you've seen the Ethereum narrative and actual token price of Ether decouple and outperform at only almost exactly the same time that the ecosystem was doubling down into these spinoffs.

So we think it's really good for shareholders. It's been good for the price of ETH. And we are being very supportive as institutional stewards, but not controllers of these organizations.

One way to think about the investment that Sharplink has made into these organizations is that it is not very large in monetary terms, but it has been an enormous is enormously powerful in terms of the coordination, the support that Sharplink personnel have provided and the role of catalyst in decentralizing the stewardship of the Ethereum ecosystem into multiple, credibly neutral and other stewards.

So a lot of hard work went into it. And the gains have, as Joseph indicated, already been quite large in terms of sentiment, but tremendous efficiency of investment from my perspective.

Thank you. Our next questions come from the line.

Good morning, everyone, and thank you for participating in today's conference call to discuss Sharplink's financial and operating results for the first quarter ended March 31, 2026. By now, everyone should have access to the first quarter 2026 earnings press release, which was issued this morning at approximately 8:00 a.m. Eastern Time.

The release is available in the Investor Relations section of Sharplink's website. This call will also be available for webcast replay on the company's website. Following the management's prepared remarks, we will open the call for questions. I will now hand the call over to Sharplink's Vice President of Business and Legal Affairs, Dodi Handy, for introductory comments. Please go ahead.

Thank you, operator. Please see Sharplink's quarterly report on Form 10-Q filed on Friday, May 8, 2026, with the SEC, along with the earnings press release that crossed the wire this morning. These documents list some of the factors that may cause the results of Sharplink to differ materially from what we say today and identify some of the risks and uncertainties that could affect our business, prospects and future results. Sharplink assumes no duty and does not undertake to update any forward-looking statements. Any forward-looking statement made by us during this call is based only on information currently available to us and speaks only as of the date when it is made.

In addition, we may be discussing or providing certain metrics today, such as ETH per share and other treasury-related performance metrics that are not GAAP measures. Please see our earnings press release and our SEC filings for further information regarding these metrics.

To set the agenda for today's call, we will begin with Joe Lubin, Sharplink's Chairman, Co-Founder of Ethereum and Founder and CEO of Consensus. Joe will provide a broader perspective on Ethereum's technological evolution, ecosystem development and long-term role in global financial infrastructure.

Next, Sharplink's Chief Executive Officer, Joseph Chalom, will share his thoughts on the current market environment as well as Sharplink's active treasury management strategy and disciplined execution to date.

Finally, our Chief Financial Officer, Bob DeLucia, will review Sharplink's financial results for the first quarter of 2026 along with key performance metrics related to our treasury.

I would now like to turn the call over to Sharplink's Chairman of the Board, Joseph Lubin. Good morning, Joe.

Thank you, Dodi, and good morning, everyone. From my vantage point as Co-Founder of Ethereum and Founder and CEO of Consensus, I want to take a step back and frame the broader technological evolution that is unfolding across Ethereum. What we're witnessing is the continued maturation of a global programmable financial infrastructure.

Ethereum has become the foundation for a new class of markets built on transparency, composability, credible neutrality and trust minimization. At its core, Ether is not just a digital asset. It is a productive programmable financial primitive that powers this system. It secures the network, enables economic coordination across applications and increasingly underpins a wide range of financial activity from stablecoins to tokenized assets to decentralized finance.

What differentiates Ethereum is the depth and breadth of its ecosystem. The Ethereum Foundation, alongside a global community of researchers, developers and organizations like Consensys continues to lead in defining both the problem space and the solution space for decentralized systems. The pace of innovation and development has dramatically accelerated recently due to assist from machine intelligence. This includes advancements at the base layer, improvements in scalability through Layer 2s and critical work around privacy, security and long-term resilience. What's most exciting about Ethereum's recent trajectory is that the base layer is now scaling visibly and at a predictable cadence. Since May of 2025, Ethereum has shipped 2 consecutive on-time hard forks, Pectra and Fusaka, raising L1 execution capacity and materially expanding data availability for Layer 2s.

The next major upgrade, Glamsterdam is currently targeted for the first half of 2026 and designed to improve block processing and supporting upgrades that will enable higher L1 throughput in the future. Ethereum's advantage is not only that it has the deepest application, developer and institutional ecosystem, it is also that the protocol continues to scale and harden at the base layer in parallel with advances at Layer 2. And recent advances in synchronous composability across L1 and L2s will soon enable cross-chain atomic transaction execution and unification of liquidity pools.

An area that has received increased attention recently is quantum computing. While quantum represents a non-zero risk over time, it is important to separate signal from noise. There will be a great deal of forensic speculation and misinformation in this space over the coming years. From our perspective, Ethereum is well positioned to lead the way for decentralized protocols into the post-quantum future. Becoming quantum safe won't be a detour for Ethereum. It is a natural outcome of the Ethereum roadmap involving real-time zero knowledge proving of blocks designed to grow transaction throughput by orders of magnitude.

The Ethereum ecosystem has been actively researching quantum-resistant cryptography for many years. A key design principle of Ethereum is cryptographic agility, meaning the network can evolve its underlying cryptographic perimeters as new, more secure standards emerge. This is not a reactive posture, but something that has been anticipated and designed for. We are already seeing work across the ecosystem exploring alternatives to elliptic curve cryptography, including hash-based and Lattice-based approaches.

These are kinds of foundational upgrades that can be implemented over time in a measured and secure way, consistent with Ethereum's approach to long-term durability. Ethereum is already ahead of both other blockchains and traditional systems and preparing for emerging risks like quantum computing. The ecosystem has been proactively developing quantum-resistant cryptography for years, supported by a core design principle of cryptographic agility that allows the network to evolve its security architecture as new standards emerge.

This forward-looking approach positions Ethereum as a more secure and resilient platform relative to others but it also reinforces the importance of building systems that are adaptable and future-proof. Unlike other blockchain technologies that are very likely to get slower in order to become quantum safe, Ethereum will scale up dramatically even while hardening against quantum computing threats.

Beyond security and resilience, Ethereum continues to extend its lead across the dimensions that matter most. It has the deepest liquidity, the largest developer ecosystem and the strongest network effects in decentralized finance, stablecoins and tokenized assets. It is where institutions are choosing to build, not just experiment, and it is where new economic models, including agentic finance and autonomous on-chain activity are beginning to take shape.

As this ecosystem grows, we expect Ether to increasingly differentiate itself from other digital assets. While correlations may persist in the short term, the long-term drivers of value for ETH are fundamentally different. They're tied to network usage, economic activity and expansion of on-chain financial infrastructure. The number of transactions per day on Ethereum has risen steadily in 2026. As Ether and Ethereum bring far greater trust to on-chain transactions, processes and agreements, various kinds of financial risks will be lessened or eliminated, and additional value will accrue to Ether in the form of a monetary premium.

Over time, we believe this will lead to a meaningful decoupling to the upside from Bitcoin. Bitcoin has established itself as a store of value. Ether is also a store of value, and Ethereum is a productive, programmable platform powering a rapidly expanding digital economy. Ether's value is increasingly driven by the breadth and depth of activity happening on chain. Ethereum is quickly becoming the settlement layer for the global digital economy, and Sharplink is positioned to translate that growth into long-term sustainable shareholder value.

With that, I'd like to turn the call over to our Chief Executive Officer, Joseph Chalom, to discuss how Sharplink is positioned to capitalize on the Ethereum opportunity. Joseph?

Thank you, Joe. Good morning, everyone, and thank you for joining us. We are now approximately nine months into executing our Ethereum treasury strategy and, importantly, doing so in a market environment that reflects strong long-term institutional adoption despite near-term crypto price consolidation. It is important for you to understand that Sharplink is building an entirely new category in public markets. An institutional-grade ETH treasury platform designed to materially compound ETH per share through disciplined capital allocation and best-in-class yield generation. Our strategy is simple: accumulate ETH accretively, make it productive and scale that advantage over time.

Today, I'd like to discuss our thoughts on where we are in the current crypto market cycle and how we're making our Ether productive as part of our active management strategy. As many of you are aware, the market is working through a meaningful deleveraging cycle that began last fall. Periods of excess leverage can take multiple quarters to fully clear through the system. While this has affected the price of Ether, our stock price and broader sentiment towards the digital asset treasury sector, it does not change the underlying trajectory of the ecosystem.

We believe we have largely moved past these deleveraging impacts over the last few months. Ether has started a strong recovery due to that leverage mostly having been cleared from the system as well as rapidly accelerating institutional adoption. The pace of institutional adoption cannot be overstated with new announcements every day. The market is experiencing strong momentum across the four core pillars of growth: stablecoins, tokenization, institutional DeFi and now agentic finance.

Stablecoins continue to scale as a core settlement layer for global payments with total supply now exceeding $320 billion and annual transaction volumes in the tens of trillions of dollars, rivaling traditional payment networks. Ethereum sits at the center of this growth, hosting more than half of all circulating stablecoin supply. This momentum is increasingly reflected at the institutional level. Hong Kong has granted its first stablecoin issuer licenses under a dedicated regulatory framework for fiat reference stablecoins. While in Europe, the ECB has moved to the next phase of the digital euro project, targeting a potential first issuance by 2029. These developments reflect a broader global shift towards regulated local currency-denominated digital money.

Tokenization of real-world assets is rapidly moving from concept to production. Just in the past month, the New York Stock Exchange announced plans for a blockchain-based platform, enabling 24/7 trading and instant settlement of tokenized U.S. equities and ETFs, while NASDAQ launched an equity token design in March 2026, putting public issuers at the center of tokenized ownership.

The DTCC recently announced plans to facilitate initial production trades of tokenized securities in July 2026 with a full-service launch in October 2026, developed alongside more than 50 financial institutions, including Goldman Sachs, BlackRock and JPMorgan.

Ethereum has emerged as the dominant settlement and issuance layer for tokenized real-world assets, representing roughly 52% of the market by on-chain value. Institutional participation is accelerating in lockstep with Bullish Global announcing a multibillion-dollar acquisition of transfer agent Equiniti to bring the traditional securities infrastructure needed to support tokenized markets at scale. Institutional momentum in DeFi is following a similar trajectory, albeit with important lessons still being learned. Despite recent setbacks, the DeFi industry seems to be rallying to raise the standards that are necessary to support the next stage of institutional adoption of DeFi for borrowing, lending, swapping and other financial activity.

What's notable is that this is the ecosystem solving its own problems without government intervention or regulatory bailouts that have historically characterized crises in traditional financial markets. Sharplink was pleased to play a small part in helping advise through this crisis. Importantly, the vast majority of this DeFi innovation, liquidity and institutional engagement continues to occur on Ethereum.

In addition to the well-known use cases of stablecoins, tokenization and DeFi, we're beginning to see the emergence of new category and use cases on Ethereum, such as agentic finance and commerce. As AI agents begin to transact, pay for data, access services and coordinate with other agents, they will need programmable wallets, stablecoins, identity and verifiable settlement, infrastructure that Ethereum is uniquely positioned to provide given its security, liquidity, developer ecosystem and composability. The scale of this opportunity is already becoming visible. Coinbase recently cited 167 million micro payment transactions processed by AI agents, a figure that would have been unimaginable just two years ago. Coinciding with the recent mainstream adoption of AI agent frameworks, Ethereum has seen its fastest-growing period of unique wallet address activity in the first quarter of 2026. We expect the advancement of AI agents to meaningfully impact and accelerate Ethereum usage metrics in the near and long term.

And finally, regulatory trends in the United States are heading in the right direction. Senators Tillis and Alsobrooks released a compromise last week on the final major sticking points in the Digital Asset Market Clarity Act, with Coinbase and Circle immediately backing the deal and urging the Senate Banking Committee to advance to markup. Progress has been positive but slow. Its passage would extend the regulatory clarity established by last year's GENIUS Act across the broader digital asset market, a significant milestone for the industry.

All of these tailwinds reinforce our long-term view. Ethereum continues to lead across these dimensions due to its security, trust, liquidity and network effects. It remains the dominant settlement layer for institutional grade activity across digital assets. For Sharplink, this is critical. We provide both institutional and retail investors with the ability to express their views on this Ethereum opportunity through our public equity. We have built a foundation to operate across market cycles. In strong environments, we can access the capital markets to raise equity and grow ETH per share in an accretive manner. In consolidation periods, our focus on productivity and optimized yield generation enables us to continue compounding ETH per share. We're designed to be productive in both environments, which brings me to our active treasury management strategy. Our North Star has not changed to compound ETH per share over time and maximizes productivity with risk management being top of mind. We often describe our model as ETH-denominated beta exposure with an alpha overlay.

We've often stated that in contrast with Bitcoin, ETH is a natively productive asset. You can stake your ETH on the Ethereum network and earn the Ethereum staking rate. From day one, we stake nearly 100% of our ETH. What we have not shared is operational depth required to do this safely at scale. Since launching our ETH treasury strategy, we've been singularly focused on building a durable and productive ETH accumulation engine. We've been doing that quietly and, in a risk, managed manner.

Sharplink aims to be the most sophisticated ETH capital deployer in DeFi, and we have the structural advantage of having long-term capital with scale. Unlike participants constrained by short-term liquidity requirements, we can deploy with a long-term horizon and structure bespoke opportunities that capture differentiated risk-adjusted yield. But sophistication means more than access, it means discipline. In a market structure where exploits remain a real risk, we apply rigorous due diligence to every deployment. We take a deliberate, patient approach to evaluating opportunities. We will not sacrifice quality for yield, and we believe this discipline is itself a source of long-term competitive advantage. When we launched last June, we started with staking and liquid staking as foundational tools for making our ETH productive using two well-respected external managers with whom we have had a very positive experience.

As we expanded our internal management capabilities, we brought the majority of our treasury management activities in-house. Our team has since been active in sourcing and evaluating a robust pipeline of ETH productivity opportunities and are actively working on new ecosystem allocations. As an example, this morning, we announced a nonbinding memorandum of understanding for our first fund partnership with Galaxy Digital. Our diligence was supported by Crypto Insights Group, a top institutional due diligence firm specializing in digital assets.

The Galaxy Sharplink Onchain Yield Fund will deploy roughly $125 million and be managed by Galaxy Digital's expert team. Their team will source deals, evaluate risk reward, deploy capital, conduct risk management and live on-chain oversight as well as portfolio diversification and construction. The goal of this fund is to generate yield in a risk-minded way. It will provide liquidity to on-chain protocols, helping their cold start problem. Sharplink is contributing roughly 80% of this capital alongside Galaxy Digital as a limited partner. In exchange, the Galaxy Sharplink Onchain Yield Fund will receive economic incentives for being an early mover and providing longer-term capital than the industry has historically offered at scale. Since we are investing with our LsETH, we will continue earning the Ethereum staking rate and retaining our ETH exposure.

We will measure the success of this fund to our shareholders by the amount of incremental ETH we can buy with the proceeds above what we would have earned through staking alone. The opportunity cost is not dollars for just ETH. It's how much we generate above holding staked ETH for the period deployed. This is what ecosystem-aligned capitalism looks like, industry participants working together to support the growth of on-chain projects through a sustainable for-profit investment model.

We believe this will be a highly effective partnership and look forward to sharing its progress over time. We selected Galaxy Digital following a rigorous and disciplined diligence process, which will serve as a benchmark as we evaluate future external strategies for a measured minority allocation of our treasury over time. Looking ahead, we expect to announce additional ETH allocations. Future ETH productivity opportunities may take different forms, including additional fund investment partnerships and active participation in on-chain vault strategies. Inbound demand and deployment opportunities have been strong, but we are not rushing. Operational rigor is nonnegotiable. As a public company, we work alongside leading legal, audit and accounting partners and every deployment must meet institutional standards. Again, as stewards of capital, we prioritize disciplined risk management over speed. I'll close where I began. Growing ETH per share remains our North Star and doing so in a way that strengthens the Ethereum ecosystem is central to our mission.

With that, I will now turn the call over to our Chief Financial Officer, Bob DeLucia, to walk through our first quarter 2026 financial results. Bob?

Thank you, Joseph. I'll begin by encouraging everyone to review our quarterly report on Form 10-Q for the period ended March 31, 2026, which we filed this past Friday afternoon with the SEC. The 10-Q provides detailed disclosures and footnotes to complement today's discussion, offering stockholders and investors a comprehensive view of Sharplink's financial position, liquidity and its treasury performance.

We will now go through the financial results for the quarter ended March 31, 2026. As we review our first quarter financial results, I'd like to remind everyone that all comparisons and variance commentary refer to the prior year quarter results unless otherwise specified. As of March 31, 2026, Sharplink held 589,305 native ETH with a fair value of $1.2 billion. In addition, we held 189,327 LsETH or liquid staked ETH and 66,102 of weETH or wrapped Ether token with a combined net cost value of $487 million. Subsequent to quarter end, our combined ETH holdings have increased to 590,824 native ETH 209,788 as if converted LsETH and 72,372 as of converted weETH for a total of 872,984 ETH as of Monday, May 4, 2026.

Revenue for the quarter ended March 31, 2026, was $12.1 million compared to $0.7 million for the quarter ended March 31, 2025. The material increase in revenue was primarily due to the continued success of our ETH staking strategy during the first quarter, including our $200 million deployment on Linea Layer 2. We had a net realized gain for the three months ended March 31, 2026, of $12 million that was due to a combination of the redemption of LsETH into ETH and the conversion of ETH into weETH in the first quarter.

Further, we had a $506.7 million unrealized loss at March 31, 2026, due to the ETH market conditions that were soft during the first quarter of 2026. SG&A expenses in the first quarter were $9.9 million compared to $1.1 million in the prior year quarter. The increase in SG&A was due to the expenses incurred in the implementation and the active execution of our ETH treasury strategy started during mid-2025. Net loss for the quarter ended March 31, 2026, was $685.6 million versus $1 million loss in the prior year quarter. Net loss for the first quarter of 2026 was driven by $191.7 million impairment charge related to the lowest intraday pricing of LsETH and weETH during the first quarter of 2026, plus the previously mentioned net of the $12 million realized gain and the $506.7 million unrealized loss.

As we previously mentioned, it is important to note that these impairment charges and unrealized losses reflect the current market pricing dynamics and follow the current U.S. GAAP accounting standards. They do not represent a realized economic loss on our ETH position nor do they reduce the number of ETH units we hold. The success of our ETH treasury strategy is measured in the prudent ETH accumulation and measuring its productivity over time.

As of March 31, 2026, the cash on hand was $16.9 million compared to cash on hand of $28.5 million as of December 31, 2025. In addition to the SEC and the CFTC announcement that Joseph mentioned previously, I would also like to highlight the vote on April 15, 2026, by the Financial Accounting Standards Board, also known as FASB, on their unanimous decision to move forward to expand the scope of their project accounting for the transfer of crypto assets to address crypto assets that provide the holder with the right to receive another crypto assets like LsETH and weETH within the current fair value standard now being used for our native ETH assets. If adopted, this would align their treatment with the fair value framework we currently apply to our native ETH holdings, which we believe would improve the consistency and transparency of our financial reporting. For additional details, our complete financial statements and accompanying footnotes, including all required disclosures and management's MD&A analysis are contained in our quarterly report on Form 10-Q for the period ended March 31, 2026, filed with the SEC.

This concludes with our prepared remarks. We will now open it up for questions from those participating in the call. Operator, back to you.

[Operator Instructions]

Our first question is from Brian Kinstlinger with Alliance Global Partners.

Can you talk about the benefits of launching the Onchain Yield Fund with Galaxy as opposed to Sharplink committing ETH directly into projects? And will there be an opportunity to increase the fund in size?

Great question. Thank you. We took a step back and recognized that we have a really talented in-house team to deploy ETH to look at opportunities. But ultimately, the Galaxy partnership is the first in scaling access to a larger number of high-quality opportunities. And Brian, what makes it compelling is that it comes with institutional diligence and risk management. It will provide us with access through the fund to a larger number of early-stage, high-quality opportunities within the on-chain ecosystem. And that's a big part of our ecosystem-first approach as we try to build long-term value for our stockholders.

And this on-chain fund essentially debuts a new type of capital to the market. Our goal is to help protocols break out from the cold start problem. And while VC funds, for example, target longer duration investments, they actually focus on higher risk, higher reward equity backing. And even with this funding, protocols find themselves in the feedback loop trying to get off the ground post launch. That's what we call the cold start problem. And typical liquid funds can't provide this type of time commitment needed to get the protocols off the ground. We, at Sharplink, because we have what we call near permanent capital or long-term capital, we're kind of uniquely positioned to provide that capital. In this case, with scale through the Galaxy Sharplink Fund. And -- most importantly, as much as we could do some of this on our own, Galaxy has unique capabilities and scale. They have a position in the market alongside ours. They also have good visibility into deal flow, and they have an ability to filter for the best opportunities in this space. So we wanted to be selective. We want to be discerning and working with Galaxy will basically be at the top of the funnel. That's why we decided to work with Galaxy and scale.

And then your second part of your question, yes, this could be the first of additional funds with Galaxy or with other asset managers or through our own investment vehicles. But the short story is it's two public companies who are best-in-class partnering together to bring unique capital to the ecosystem with a level of diligence that you would expect from an institutional allocator.

That's great. My follow-up would be, is there a way to think about what a reasonable annual or long-term yield might be on a fund like this? Or is it too soon to say?

I think it's too soon to say. What I will say is it's part of an overall balance sheet portfolio allocation where, as I mentioned on my call, we started by fully deploying into native simple staking and liquid staking. You saw in January, we took a portion of our portfolio around 8%, and we put it in a composable liquid restaking token alongside Consensys Linea, etherFi and EigenCloud. You can think of this as the next step in that efficient frontier. It will be seeking higher yields than you would get in the standard Ethereum staking rate. But again, we're looking to hit singles and doubles. We're not looking for VC-like returns. So that's how I would frame it. And I would share that in the future, we'll be more transparent as to what our collective yield and returns are as we complete these deployments. So we will be more transparent. But to date, we've been beating the Ethereum staking rate, and we intend to continue to do that as our benchmark and hurdle.

Our next question is from Lance Vitanza with TD Securities.

My question is, I guess, what in your view is the single most underappreciated driver of Ethereum demand over the next 12 to 24 months?

I think the most obvious answer would be stablecoins, and you're seeing them go from being a single-use crypto use case to essentially be a platform where lots of different types of payments will happen. It could be as simple as crypto pairs on-chain. But more importantly, you're starting to see it being used in cross-border remittances. You're starting to see them being used intracompany for treasury operations and optimization incorporates. You're starting to see them be used for corporate payments across borders. That is something that's very sustainable, very clear.

You can almost argue it's the first proof case for tokenization. But I would say the faster growing and bigger opportunity is tokenization of real-world assets. To date, there's about $30 billion to $35 billion of on-chain real-world assets that have been tokenized. You're starting to hear movements from the New York Stock Exchange, NASDAQ, DTCC and just last week, a multibillion-dollar acquisition by the Bullish Exchange of Equiniti, a traditional transfer agent, in fact, our transfer agent, all with the goal of doing step function change in tokenization.

So now you have issuers, you have platforms, you have liquidity venues. And my expectation is that will be growing exponentially. And then the final thing, which I think is in the early, early stages, and it's too soon to forecast is the growth in agentic payments. The Coinbase report a couple of weeks ago from Brian Armstrong said there were about 160-plus million micro payments in agentic finance just in the first quarter, leveraging a protocol, an open-source protocol called X402 for micro payments. These payments, whether they be stablecoins, transactions and tokenized assets, DeFi or agentic need payment rails for settlement. And to date, Ethereum has been the dominant platform, capturing over 50%.

So I think it's those four pillars. Stablecoins are the most proven use case. I would say that tokenization is where we expect step function change. DeFi will be the rails in the future for stablecoins and tokenized assets to be traded and swapped and borrowed and lent. And agentic, I would say, is the wildcard. I can't tell you when, but it might be the most impactful over time. And Ethereum is not only well positioned, it has a license to win.

So -- my follow-up is to the extent that activity increasingly migrates to Layer 2s, how confident are you that Ethereum captures sufficient value at the base layer? And what, if any, evidence gives you that conviction today?

Well, I think we saw an intentional policy from the Ethereum Foundation several years back to help scale Layer 2s until such time as Ethereum Layer 1 or mainnet had the throughput and a fee level that was necessary to support the activity. You've seen in the last several upgrades and what's coming next that Joe Lubin mentioned, Glamsterdam, you're seeing step function increases in throughput and a significant reduction in the cost per transaction. So you'll have both the capacity and the economic incentives.

And I would expect more and more activity over time to return to Ethereum Layer 1 mainnet. And that should inure to the benefit of not only mainnet but the Ether token that's used to secure those transactions. So years ago, you heard a lot of talk about Solana being faster and cheaper. -- as these upgrades are happening, Ethereum is giving Solana run for the money. But in difference -- in contrast, it has both the security, the developer community and the staking ecosystem to provide economic security. So we're quite confident that over time, more and more of the value will inure to the Layer 1, and that's positive for Ether, our treasury asset.

Our next question is from Devin Ryan with Citizens Bank.

This is Neo on for Devin. Maybe my first question on agentic finance. So you guys gave quite a lot of contexts in the opening remarks. But I guess maybe you could talk a little bit more about how you see it evolving over the next 12 months. It kind of sounds like payments are probably like the big pushing point but maybe trading potentially as well.

And then I guess, could you also elaborate a little more on how you think Ether is best positioned here, maybe more from a transaction speed point as opposed to cost?

Yes. I think we're still early, but it's unbelievably promising what we're seeing across not only agentic finance, but also commerce. So you have what I would consider a convergence of a handful of mega forces -- the first just being the availability and growth in wallet on-chain infrastructure, smart wallets. They're somewhere between 600 million and 800 million wallets, and they are growing quite rapidly. And those wallets contain both stablecoins, Bitcoin, ETH, Solana and other tokens.

But I think what you're starting to see is increasingly, those wallets will act in a more autonomous manner, not on their own, not as the masters of individuals, but actually within the framework of X402 micro payments and a new protocol released on Ethereum called ERC-8004. These are the road rails of this agentic highway. And what you're going to be seeing is both micro payments as well as, I believe, a higher transaction volume for people who are instituting or developing autonomous trading strategies. They need guardrails and they need throughput and Ethereum mainnet is offering that, but it will also happen on the Layer 2s.

You're starting to see this happen on-chain because of the confluence of the wallet infrastructure. You're also seeing AI agent infrastructure through Claude, through Anthropic and these capabilities being integrated with that wallet infrastructure. And then finally, when you start seeing tokenization of assets, and I don't mean illiquid assets like real estate and private equity, but I mean ETFs, money market funds as well as tokenized individual securities.

You're going to see this wallet infrastructure support things that you had only seen in institutional finance on Wall Street. So for example, the borrow or lend tokenized securities and funds for yield, just like institutions have been doing for generations or yield harvesting on-chain in an automated manner, whether on DeFi or even just moving assets out of low-yielding bearing accounts into higher-yielding opportunities, including stablecoins.

And that confluence of a wallet infrastructure, the automation we're describing as well as the throughput of Ethereum really creates a guide path of what we're going to see in the future. I would also just add, you're seeing a wealth transfer that's going to happen over the next decade to of tens, if not $100 trillion of assets to a more AI native population. This confluence of events is only going to accelerate agentic finance and commerce and Ether and the Ethereum opportunity are positioned to win. I can't tell you the time line, but I think we're probably underestimating the impact on our daily lives, and that's going to be very, very beneficial for Ether as a treasury asset.

Yes. The time line is ramping up now. So from consensys' perspective, as we observe activity in the different MetaMask surfaces, whether it's an embedded wallet surface or APIs, SDKs or the actual mobile or extension client, we're seeing a lot of what we believe is agentic activity. And we're a privacy tool. So we're inferring certain things.

But a ton of agents are using MetaMask to do different things in the space. It's people and companies doing trading strategies, setting up vaults, adjusting vaults. And we all need to be pretty careful. As some of you probably heard, an agent can take your instructions, read your instructions, maybe compact its memory and forget what you told it to do or not to do. And so while we've seen huge ramp-up in payments in ERC-4 or 8004, which Marco De Rossi Consensys wrote with Ethereum personnel and Google personnel. That is all super healthy activity. We're seeing some activity that really needs to be guardrailed. And so we've launched a delegation framework and toolkit that enables you to guardrail what agents can do.

So while we love our AI agents and other forms of machine intelligence, we really need to ensure that they don't do things that with either our own MetaMask wallets or MetaMask wallets that we get them that are outside of proper behavior like exceeding their allowances or sharing information that they shouldn't be. So our ecosystem needs to take a prudent, careful approach, but it's happening really fast.

A lot of color there. And maybe just a short follow-up. So it looks like traditional ETH is probably around a little bit below 70% of like total ETH. Is there a number kind of in the long run that you're targeting to like begin to diversify more into alternative strategies?

I would expect into the long term that the vast majority of our ETH will stay in simple staking as well as liquid staking protocols. But it does mean that a minority of our portion of ETH of our diversified portfolio can follow the strategies that we've done and new strategies. But I do think that will be the minority of the portfolio over time. But we're thinking of it as an efficient frontier. And each step we take is more sophisticated, requires more diligence.

But again, on an overall basis, we're trying to exceed the Ethereum staking rate, but we're not trying to hit triples and home runs. We're trying to hit singles and doubles in a diversified portfolio. So I believe the majority will be -- will stay in staking. As we see opportunities, we'll be opportunistic, but we'll be prudent.

Our next question is from Fedor Shabalin with B. Riley Securities.

My first one is kind of a high level. As institutional adoption of ETH continues to build, yet token price has lagged the pace of that adoption. In your opinion, what explains the disconnect? And when do you expect it to close? And maybe which catalyst do you see as necessary to trigger a rating of the price of the token?

Yes, great question. We are seeing a divergence because all the real-world signals around stablecoin, tokenization, DeFi and the tail opportunity of agentic are all screaming that we're seeing a once-in-a-generation reset of financial rails. And the vast majority of this stuff is happening in the Ethereum ecosystem. So as I've explained earlier, it is leading by a wide margin in each of these domains.

I think over the last year or so, both Bitcoin and ETH have become more correlated to macro geopolitical and liquidity trends than we had seen in the previous 5 to 10 years. And at the end of the day, we are trading in a band that is subject to short-term market structure. And I think as some of the short-term market structure works itself through, whether it was the deleveraging we saw last October, whether it's some of the liquidity that's left the system and some of the geopolitical risk, we'll start seeing it trade more on its long-term fundamentals.

As I mentioned on my earnings call, we think the market is working through the end of a multi-quarter deleveraging cycle. It's obviously created a disconnect between price and the underlying adoption. But fundamentals are strengthening. I've shared that earlier on my call. Historically, we've seen this pattern before, where we've seen periods of consolidation followed by even stronger price appreciation and ecosystem growth. So I think in my view, we are seeing at this point a temporary divergence between short-term market structure and macro and what the long-term fundamentals are. But as an Ethereum treasury, we are less focused on the day-to-day. We are here to deploy long-term capital into this thesis. We view this as a temporary dislocation and not in any way structural weakness. And if anything, what you've seen is Ethereum over the last year, including the most recent releases and what's coming, really create a dominant throughput, security and trust framework that other blockchains are really going to struggle to keep up with.

So I'd be more focused on what you're hearing from Larry Fink and the likes of Franklin Templeton and NYSE and NASDAQ and the DTCC than I would be in the short-term price movement. You can't overreact. You have to focus every day on what's right for the mid and long term, and that's to continue to invest in this institutional adoption. So again, a divergence between short term and long term. We're always focused on the long term.

And let me pan out a little bit and put this into a longer time frame context. So the world is in a complicated place. We're going multipolar in terms of power structures in the world. And the world is really composed of platforms. It's platforms all the way down from software platforms like AWS, Instagram, Facebook, Twitter, Nation-states or platforms you can be de-platformed with respect to your citizenship or your voter [rolls]. And that's what decentralized protocols, Bitcoin and Ether rose to address. So the value propositions of Ether and Bitcoin are credible neutrality and censorship resistance. So Bitcoin is censorship resistant and as neutral as it can be with respect to certain aspects of money where Bitcoin is money.

And Ether and Ethereum are censorship resistant and incredibly neutral with respect to providing a decentralized platform for decentralized applications. And that's all about moving many Web2 applications and elements of traditional finance and other elements of society to something that looks like Web3 or a decentralized worldwide web and to decentralized finance.

So to accomplish this, Ether and Bitcoin need to be rigorously decentralized because of their special period of initiation and time, they're the only two that have been able to accomplish that and protect that. So Ethereum now has to scale transaction throughput massively, but not ever at the expense of the core value propositions of censorship resistance and credible neutrality, and we've achieved that, and we continue to achieve that.

So Ethereum has been slower as a Layer 1 than some other Layer 1s in scaling because Ethereum would not compromise its rigorous decentralization. The hard but necessary path is achieving global scale via many improvements at Layer 1, which are going on really rapidly right now with some research breakthroughs and via further scaling mechanisms at the modular Layer 2 and the modularity at Layer 2 is incredibly valuable for scaling and providing different kinds of logical context for companies or nation states, et cetera.

So all of this is now taking shape in the form of Glamsterdam, the next hard fork Hegota, hard fork after that, where we scale Layer 1. We scale BLOBs at Layer 2, and there are some specific pieces that protect censorship resistance. And we're at the point where we've essentially -- we're on the cusp of achieving two holy grails for blockchain.

The first holy grail is unique -- pretty unique to Ethereum. It's real-time proving of blocks at Layer 2 and at Layer 1 and real-time proving of blocks enables something that we're calling synchronous or near synchronous composability. And there are projects -- we have project at Consensys, our friends at Gnosis have a project called the Ethereum Economic Zone, where we are unifying fragmented liquidity pools and unifying execution context across different layer 2 networks and down into Layer 1, where we can initiate a transaction or set of transactions at either Layer 1 or Layer 2 and bring in transactions in the same execution context atomically so that they can draw from different pools of liquidity and happen magically via zero-knowledge proofs effectively in a single transaction or in a set of transactions that are in the same block or in consecutive blocks. So we are pretty much there. There's some details left to be worked out, but the unification of the Ethereum ecosystem, the Ethereum platform is underway.

It's very helpful color related to the architecture of the ecosystem. And my quick follow-up is has an internal nature. So about your partnership with Galaxy. So with Galaxy running the funds investment management, what's left here for Sharplink's in-house asset management team to do? Kind of maybe help us reconcile your focus on internal management of your majority of your assets with outsourcing this strategy to Galaxy.

Sure. I think some of it is about the level of scale and diligence. We see a pipeline of opportunities, not just in staking, liquid restaking and through our strategic partnership with Consensys -- but from time to time, we will partner with others. We are not outsourcing this to Galaxy. We founded the fund together. We are both limited partners in the fund, and this is not going to be a black box fund where we just wait to receive returns. So while they are the general manager, the general partner and manager of the fund, we are both LPs, and this is a partnership. That's why it's co-branded. So we don't view this as outsourcing. We view this as an opportunity to capture on-chain yield opportunities and scale and frankly, in a way that others have not been able to do. And we're doing it with a partner we trust, with a partner that's best-in-class and frankly, one that has skin in the game.

So I think what we're doing is first of its kind. But again, much of the asset management, in fact, the majority is happening in-house, but we will find select opportunities where partnering will yield better results for our investors, and we're doing it in a capital-efficient manner. So we will look at every opportunity at both the cost and yield perspective. And in this case, it made more sense to partner because of the scale we can provide to deploy to multiple opportunities within a single framework.

So again, you would have seen we've in-sourced the vanilla staking ETH purchases, but we will always use the best framework to generate the results. So we don't see this as being inconsistent. We see it being entirely consistent in how to build an optimized portfolio.

Our final question is from Joe Vafi with Canaccord Genuity.

This is Will Johnston on for Joe. In the quarter, we saw some large DeFi exploits, which put some pressure on DeFi TVL. And I know you mentioned this plus some deleveraging since last fall. So just wondering if you could provide some more color on these DeFi dynamics and how if at all this has changed your view on risk on Layer 1s versus layer 2s and deploying through native versus liquid staking.

Yes. Great question. Thank you, Will. And actually very timely. -- there's a reason we're doing this at this time. So for more context, the recent hacks that involved the Kelp DAO were obviously unfortunate. That said, we have pretty institutional and advanced partner vetting, whether it be asset management partners, whether it be protocols, we have lots of internal controls and custody that's aimed to prevent us from having exposure to things like this. And obviously, none of our assets were in any way affected.

That said, it was a major step back in the short term for the broader DeFi landscape. We're actually really happy to see fast-moving actors, high-quality actors who are part of what they call the DeFi United recovery efforts, and we played a small part in helping advise on that recovery to stabilize the DeFi markets. But it's important to note, these hacks, whether it be the Solana perp DEX on Drift, the Kelp DAO, they did not happen because of a smart contract exploit. The majority of these issues happened off chain, essentially exploiting centralized points of failure, either at the social layer or how people, humans configured transfer of assets through bridging. The technology is secure in our view. The vast majority of these are not smart contracts. They're human exploits. And when you have centralization and social engineering combined with AI, this can happen, including off chain.

And in our view, what is required is to continue to support further decentralization. In our view, the bar going forward needs to be higher. It needs to be at the Sharplink Galaxy institutional grade operational standard, and that's the standard we hold ourselves to and our partners to. We actually have worked closely through this situation. Our team worked closely with our strategic partner, Consensys, along with Joe Lubin, who's on the call, who've stepped in.

We played a small part in helping structure the capital contribution with Aave. And at the end of the day, we believe this is a net positive for the entire ecosystem, and it helped stabilize markets. At the end of the day, you've seen issues in both traditional finance and on-chain finance. And our top priority is to safeguard our investors and our balance sheet. And we've taken an extremely conservative approach when vetting protocols. We have vetted dozens of protocols, most of which we turned away, and that will never change. And finally, it's worth noting that the security setup that was exploited in this most recent attack would not have passed our own due diligence checks. And for future deployments, we feel very comfortable with our risk management teams. We feel comfortable with our policies. In the case of the Galaxy Sharplink Fund, we're working with a partner who has probably the largest on-chain security team for these type of deployments, and we're going to use scrutiny and take our time rather than just prioritizing yields.

So when we look at future investment opportunities, the standard is going to be high. And overall, when you have institutions like ours who are setting those standards, who are holding them rigorously, this is ultimately very good for the DeFi community because you end up reinforcing those protocols who do things the right way. And those protocols who do not will not deserve to get allocations of this type of capital. So we're not shying away from this. We're just doing it with a different set of standards than you've seen exploited in the past.

With no further questions, I would like to turn the conference back over to Joseph Chalom for closing remarks.

So first of all, thank you, everyone. And before we close, I want to leave you all with a very simple perspective. We are operating in a market that's still early, it's volatile and its progress is being built out in real time. But the direction has never been clearer and it's becoming increasingly clear that Ethereum is emerging as the foundation for a new financial system for new financial rails and the opportunity ahead for Sharplink and our investors is extremely compelling.

Our role is not to focus on or try to predict short-term market movements, but we are executing with discipline and consistency. Sometimes we slow down in order to speed up to build a platform that compounds value over time. And we've built a model that's designed to perform across market cycles -- we're focused, again, on growing ETH per share, and we're grounding our strategy in making our ETH the most productive, but in a risk-managed and a repeatable way.

We've been doing it this way from day one. And what we focus on is disciplined execution, responsible growth and a real focus on long-term value creation for our shareholders. We are energized by the opportunity ahead, and we're confident in the path that we're on. So again, thank you all for joining us today, for your continued support in Sharplink's vision, and we look forward to updating you again in the next quarter. Thank you.

Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation.

Good morning, everyone, and thank you for participating in today's conference call to discuss Sharplink's financial and operating results for the year ended December 31, 2025.

By now, everyone should have access to the full year 2025 earnings press release, which was issued this morning at approximately 8:00 a.m. Eastern Time. This release is available in the Investor Relations section of Sharplink's website. This call will also be available for webcast replay on the company's website. Following management's remarks, we'll open up the call for Q&A.

I'll now hand the call over to Sharplink's Vice President of Business and Legal Affairs, Dodi Handy for introductory comments.

Thank you, operator. Please see Sharplink's annual report on Form 10-K filed last Friday afternoon with the SEC and the earnings press release which crossed this morning. These documents list some of the factors that may cause the results of Sharplink to differ materially from what we say today and which identify risks and uncertainties that could affect our business, prospects and future results.

Sharplink assumes no duty and does not undertake to update any forward-looking statements. Any forward-looking statement made by us during this call is based only on information currently available to us and speaks only as of the date when it is made.

In addition, we may be discussing or providing certain metrics today, such as ETH per share that are not GAAP metrics. Please see our earnings press release and SEC filings for further information regarding these metrics.

To set the agenda for today's call, we will begin with Sharplink's Chairman, Co-Founder of Ethereum and Founder and CEO of Consensys, Joseph Lubin. Joe will be providing a broader perspective on Ethereum's continued evolution and institutional adoption shaping the digital asset economy. Next, Sharplink's Chief Executive Officer, Joseph Chalom, will discuss the company's strategy and execution as an institutional grade ETH treasury platform, including key accomplishments from the full year and our priorities looking ahead. Finally, our Chief Financial Officer, Bob DeLucia, will review Sharplink's results for the year ended December 31, 2025, and key performance metrics related to our ETH treasury.

So with that said, I'd now like to turn the call over to Sharplink's Chairman of the Board, Joseph Lubin. Joe, the floor is yours.

Thank you, Dodi, and good morning, everyone.

As Dodi mentioned, I'm the Chairman of Sharplink, Co-Founder of Ethereum and Founder and CEO of Consensys. I've been involved with Ethereum since its inception, and I want to start by grounding today's discussion in what has fundamentally changed and why 2025 represented a decisive moment in Ethereum's evolution.

This journey has not been and will not be linear. We can't ignore that price volatility is present but it does not negate progress. Volatility is a feature of new financial architectures, particularly in their formative years. ETH is a foundational element of a start-up economy. And when that economy becomes larger and more established, ETH will become far more valuable and much less volatile.

Even today, with the price volatility we've seen, it could not be clear that Ethereum has become the financial backbone of on-chain markets and the dominant settlement layer for global digital finance. Ethereum and its layer 2 ecosystem secure approximately 60% of all stable coins and tokenizes real-world assets and over 2/3 of total DeFi value.

For much of the past decade, Ethereum and decentralized natural infrastructure was often described as an experiment or an impractical vision. With the adoption we're seeing, it is clear that phase is now firmly behind us. The decentralized trust that the credibly neutral Ethereum platform uniquely provides has scaled just in time for a financial system that desperately needs better forms of trust, inter-operation and collaboration. What we saw in 2025 is that institutional adoption profoundly accelerated.

This is visible in the media with the constant drumbeat of announcements from financial institutions, large and small. But what is visible is only the tip of the iceberg. Institutions have gained experience with private permissioned Ethereum networks for years. In 2025, global regulators and legislators began to give institutions permission to build on and use public permissionless Ethereum in addition to more private and confidential networks, which will increasingly take the form of Ethereum Layer 2.

Top financial firms are not just facilitating investment in ETH, they are actively building on it. For example, just in the latter half of 2025, Fidelity launched a tokenized money market fund and built its stablecoin FIDD on Ethereum. BNY Mellon partnered with Securitize to launch a tokenized AAA-rated collateral loan obligation fund on the public Ethereum blockchain. And JPMorgan Asset Management launched its first tokenized money market fund on the public Ethereum blockchain. BNP Paribas, Santander, ING and other global banks started piloting stablecoin and tokenized deposit projects, levering Ethereum and Ethereum Layer 2 solutions.

Exchange trade products had expanded access, while tokenized funds, deposits and even equities are increasingly settling on Ethereum rails. This distinction matters. Institutions are now using Ethereum infrastructure creating long-term structural demand for both the network and its native asset, ETH. From a technology standpoint, Ethereum is scaling to meet the needs of major institutional players. Ethereum continues to advance performance and throughput through core protocol upgrades.

The Pectra upgrade delivered meaningful improvements to validator performance, efficiency and overall network capacity. The Fusaka upgrade, which went live in December pushed that further with enhancements to data availability and execution. And Ethereum term is becoming the settlement and coordination layer for agentic transactions as well. I'm excited to see the Ethereum Foundation's recent support of infrastructure to support this natural fit. As AI agents begin to transact for their humans or autonomously, whether executing payments, managing portfolios or coordinating across protocols, they require a settlement and operating environment that is programmable and permissionless.

The combination of smart contract composability, deep liquidity and battle-tested security makes Ethereum the most credible infrastructure for agent-facilitated and agent-to-agent economic activity at scale. As a genetic transaction volume grows, it represents a meaningful new source of settlement demand that flows directly through the Ethereum network and, of course, accrues value to ETH.

Ethereum has done the hard work. Liquidity, decentralization, security, uptime and developer adoption over more than a decade of continuous never-down operation. What we are seeing now is a convergence of technological maturity regulatory clarity and institutional appreciation and adoption. And this huge ramp in attention from institutions is providing forcing functions that will rapidly drive improvements across the Ethereum ecosystem from shorter staking [ executes ] to fast and synchronous composability across the term Layer 1 and Layer 2.

With that, I'd like to turn the call over to our Chief Executive Officer, Joseph Chalom, to go further on how Sharplink will capitalize on this momentum. Joseph?

Thank you, Joe, and good morning, everyone. As Joe outlined, Ethereum has entered a new phase of institutional adoption and Sharplink was purpose built to operate with focus and discipline at both this moment in the market and for the long term. From the outset of our ETH treasury strategy, our approach has been deliberate and measured prioritizing long-term value creation over growth of holdings for its own sake. Our objective is to accumulate ETH through accretive means and manage it responsibly with an institutionally governed public company framework.

That performance and discipline are increasingly being recognized by the market. According to the latest Form 13F filings, our institutional shareholder ownership has grown to approximately 46% as of December 31, 2025. The highest percentage of institutional holders of any Ethereum treasury company. We believe this demonstrates that investors are actively differentiating Sharplink from the broader digital asset treasury category. As the space matures, we are seeing a clear rotation towards platforms that combine productivity, governance and shareholder alignment. We believe we are positioned at the forefront of that shift.

At a high level, Sharplink's value proposition rests on 3 pillars: first, structural ETH accumulation that is growing ETH per share in an accretive manner; second, productive treasury management, generating yield above native staking rates through partnerships and innovation. This aims to ensure that the ETH we hold actively contribute to shareholder value rather than remain idle on our balance sheet; and third, strong public company governance and transparency.

These are institutional controls and disclosures that our expert in-house team has put in place. Our north star is clear, to compound eat per share over time and maximize productivity of our balance sheet. It is not to accumulate ETH at all costs or passively wait for ETH price appreciation. We approach this by redefining the efficient frontier of institutional yield, evaluating staking, re-staking, selective DeFi and actively managed allocation opportunities through an institutional risk management lens.

We believe our differentiated treasury management approach will outperform other digital asset treasuries that are not engaging in active portfolio construction and management. Our scale permitting capital base and internal expertise enable us to structure bespoke multiyear deployment arrangements that are generally unavailable to individual investors or passive exposure vehicles. These deployments are designed to enhance ETH denominated returns while maintaining disciplined standards around custody, liquidity, compliance and risk control.

A great example of this initiative is our deployment into Consensys' linear Layer 2 chain, where we allocated $200 million in ETH in partnership with ether.fi and EigenCloud to generate ETH denominated returns that exceed standard staking rates. This institutional-grade risk managed structure is secured with an anchorage digital bank, our regulated qualified custodian and reflects the type of innovative opportunities we intend to continue pursuing and replicating as the ecosystem evolves.

On the regulatory front, the passage of the Genius Act and continued progress around the Clarity Act and related market structure legislation represent meaningful steps towards distinguishing decentralized digital commodities, like Ethereum's native asset ETH, from centralized token issuers. While the Clarity Act has not yet passed and legislative outcomes remain subject to process, the overall direction is constructive. Greater clarity around market structure and digital asset classification will reduce uncertainty for public companies, asset managers and regulated intermediaries.

For institutions, regulatory ambiguity has historically been a gating factor more than market volatility. Clear statutory definitions and emerging market structure frameworks will allow boards compliance teams and risk committees to further evaluate participation in the crypto ecosystem with greater confidence. As regulatory guardrails solidify capital that has been sitting on the sidelines can engage through familiar governance, reporting and custody standards.

Regulatory clarity were lower friction, reduced perceived legal risk and broaden institutional participation in the Ethereum ecosystem. And as more institutional market participants are able to enter on-chain capital markets Sharplink plans to continue growing its lead and executing on opportunities created by regulatory tailwinds through partnerships, on-chain deployments and compounding yield strategies, we're on our way to becoming the world's most sophisticated bridge between traditional finance and crypto-native deployments.

To execute on these opportunities, Sharplink has assembled a dedicated in-house institutionally experienced team with deep sophistication across capital markets, risk management and digital asset operations. Unlike many participants in this space, we manage the majority of our treasury activities in-house rather than relying on third-party discretionary managers or outsourced treasury platforms. We believe this is a structural differentiator for Sharplink and for our shareholders. Many digital outset treasury companies externalized treasury management to third-party sponsors under exclusive long-term arrangements that include high fees or revenue sharing.

That structure can create a compounding value league that works against stockholders over time. We built our platform internally with a more of a fixed cost base so that the value we generate stays within the treasury and compounds for our stockholders. Our economics are aligned directly with our shareholders. This internal treasury model gives us greater control over execution, tightens risk oversight and has better alignment with public company governance.

We believe this structure will become increasingly important as investors differentiate digital asset treasuries based on governance, cost efficiency and true value creation per share. Ethereum, like all transformative technologies in their early adoption, experiences periods of heightened volatility. We have all felt the recent drawdown in ETH price and other crypto assets and Sharplink is not immune to that. Our financial results will naturally reflect this volatility through unrealized gains and losses that can move materially from quarter-to-quarter. But our strategy is designed to operate through up cycles and down cycles, not to react to them.

We believe Sharplink is both a procyclical and countercyclical investment in strong markets, we can efficiently access capital markets to grow ETH per share in an accretive manner. We demonstrated this in 2025, raising roughly $2.1 billion in equity capital via our at-the-market facility. Our constant focus on productive treasury management is important regardless of the market regime. Putting our ETH to work and generating incremental ETH enables us to grow our ETH per share metric in both bull and bear markets alike.

In more challenging markets like we have seen in the last few months, this focus on productivity and risk-adjusted yield becomes even more important and is a key differentiator for Sharplink. We believe it's important for the market to distinguish between short-term price movements and the long-term value creation. Our belief is that a lot of the volatility we have experienced recently is related to the ripple effects of the liquidations and deleveraging we saw on October 10 of last year. That day was the single largest deleveraging event in our industry's history.

Similar to what we saw at the end of 2022, it can take several months for the system to fully unwind and rebound following an event like this. We believe strongly in the long-term Ethereum opportunity, and our premise is simple. You can get beta exposure to ETH by investing in Sharplink and own more ETH per share tomorrow than you do today through our disciplined active capital management.

It's also important to emphasize we don't attempt to call bottoms or predict short-term market movements in the price of ETH. Ethereum remained a volatile asset class and periods of drawdown are part of its historical cycles. What gives us conviction is not short-term price action, but structural macro trends. Institutional adoption, regulatory clarity, the growth in stable coins, tokenized assets and DeFi participation. Whether this crypto price consolidation proves to be a temporary noise or a longer-term cycle, our focus remains unchanged. We compound ETH per share through disciplined capital allocation and productive treasury management.

Volatility is not a flaw of this asset class. It's a byproduct of monetizing a rapidly emerging and innovative new financial system. Our role is to harness that volatility through disciplined capital allocation rather than simply react to it. We have also taken steps to ensure that our name and brand accurately reflect who we are today. Last month, we formally updated our branding and digital presence Including the launch of a new website and adoption of our new tagline, Ethereum with an edge. As part of this process, we've also removed the word gaming from our corporate identity. Reflecting that our strategy, capital allocation and long-term value proposition are now centered on Ethereum and the Digital Asset Treasury Management segment.

This rebranding is not cosmetic. It is fully aligned with what Sharplink has been building since June of last year and a signal of our continued commitment to building an institutional grade, ETH treasury company. We would be honored if you thought of us as your sharpest link to growing your exposure to ETH, the foundational asset of the emerging decentralized economy.

Looking ahead, we remain focused on executing with consistency and clarity as the Ethereum ecosystem continues to grow and scale. We believe Sharplink is uniquely positioned to provide investors with institutional grade exposure to Ethereum through a transparent publicly traded company, offering stockholders a disciplined and risk management way to participate in the long-term growth of the Ethereum network and opportunity. We are also prioritizing the expansion of productive ETH deployment strategies, deepening institutional partnerships and maintaining capital market flexibility to increase ETH per share.

Finally, I'd like to really acknowledge the stellar efforts of our entire team for working relentlessly over the past year and in a really focused manner to build our new ETH treasury strategy. Importantly, we do it in an investor aligned manner.

With that, I'll turn the call over to our Chief Financial Officer, Bob DeLucia, to walk through our full 2025 financial results. Bob?

Thank you, Joseph. I'd like to remind our listeners to review our annual report on Form 10-K as of and for the year ended December 31, 2025, which we filed, Friday afternoon, with the SEC. The 10-K provides detailed footnotes and related disclosures that complement our discussion today, offering stockholders and investors a comprehensive view of Sharplink's financial position, liquidity and ETH treasury performance.

We will now go through the financial results for the year ended December 31, 2025. As I review our full year results, I'd like to remind everyone that all comparisons and variance commentary referred to the prior year period, unless otherwise noted. As of December 31, 2025, Sharplink held 640,026 ETH, with a net fair value of $1.9 billion. In addition, we held 204,409 LsETH or liquid stake ETH with a cost value of $501 million.

Subsequent to year-end, our combined ETH holdings have climbed standing at 604,618 ETH, 208,893 as if converted LsETH and 55,188 as if converted WeETH for a total of 868,699 ETH as of Monday, March 1, 2026.

Revenue for the year ended December 31, 2025, was $28.1 million compared to $3.7 million for the year ended December 31, 2024. The increase was due to the success of our ETH staking strategy during the year with taking revenues increasing to $15.3 million in the fourth quarter, from $10.3 million in the third quarter of 2025, an increase of nearly 50% between the third and fourth quarters.

We achieved this growth even as the ETH market price was falling. We also had a net realized gain for the year ended 2025 of $55.2 million. That was due to the conversion of ETH into LsETH and the redemption of LsETH in the fourth quarter. Further, we had a $616.2 million unrealized loss at December 31, 2025, due to the ETH market conditions that deteriorated during the second half of 2025.

SG&A expenses for the year ended were $42.3 million compared to $5.7 million for the year ended December 31, 2024. The increase in SG&A was due to the expenses incurred in the implementation of our ETH treasury strategy during 2025. Net loss for the year ended December 31, 2025, totaled $734.6 million versus a net income of $10.1 million in the previous year.

The net loss was primarily driven by a $140.2 million impairment charge related to the lowest pricing of LsETH in the previously mentioned $616.2 million unrealized loss. These charges and losses were offset by a realized gain on the conversion of ETHs to LsETH and an LsETH's redemption during 2025 of $55.2 million. It is important to emphasize that the impairment charges and unrealized losses reflect market pricing and follow the current U.S. GAAP accounting standards.

They do not represent realized economic losses on our ETH position nor do they reduce the number of units of ETH we hold. The success of our treasury strategy is measured in a disciplined, ETH accumulation measuring its productivity over time and not based on short-term market fluctuations. As of December 31, 2025, cash on hand was $28.5 million compared to cash on hand of $1.4 million as of December 31, 2024. Additionally, at December 31, 2025, we held $1.9 million in USDC stablecoins as a financial asset.

For additional details, our complete official audited financial statements and accompanying footnotes including all required disclosures, risk factors and management discussion and analysis are contained in our annual report on Form 10-K for the period ended December 31, 2025, filed with the SEC.

This concludes our prepared remarks. We now open it up for questions from those participating on the call. Operator, back to you.

[Operator Instructions]. Our first question comes from the line of Fedor Shabalin with B. Riley Securities.

My first one is on capital rising. If the stock remains range-bound at these levels, are you evaluating alternative capital rising way to secured lending against the ETH Treasury or non-dilutive instruments just to continue growing ETH concentration develops server pressure the equity? Or more broadly, can you frame for us what the 2026 capital plan looks like in terms of magnitude and mix?

Sure, I'll take that. Good morning, Fedor. Our approach to raising capital is actually very straightforward and disciplined. We will access the equity markets when doing so is clearly accretive to our ETH concentration per share. That is our governing metric in our north star. If the issuance of new equity capital increases ETH concentration on a per share basis, we'll act decisively. But if it does not, we won't.

And capital markets activity is therefore very, very market dependent and not strategy dependent. We do not issue equity to grow the balance sheet or simply to pursue scale for its own sake. The $2.5 billion we raised earlier in 2025 was executed under really favorable market conditions and increased our ETH per share in a meaningful way. And going forward, we're going to use the same discipline and apply it whatever the market condition is. Growth and accumulation is a byproduct of accretion. Growth and accumulation for its own sake is not the objective. So our north star continues to remain compounding eat per share over time.

The second question was about essentially leveraging our balance sheet to borrow against our ETH to raise capital. And at this point, we haven't decided to do that, but we've maintained the flexibility and relationships with the market to do that if it made sense.

That's helpful. And my follow-up, in the context of one of your strategic objectives for 2026 specifically on the expansion of partnership opportunities with Ethereum ecosystem. And I guess this one is for Joe Lubin. Given your history as an Ethereum co-founder, alongside Vitalik Buterin, could you help us understand the nature of your current working relationship with Vitalik? And specifically, does your proximity to the core technical leadership give sharing any information or strategic advantage when it comes to anticipating protocol level changes, like upgrades or maybe shifts in the ETH road map that could impact the value or utility of the treasury?

And more broadly, should investors see you, Sharplink, as having a collaborative relationship with Ethereum's technical leadership? Or is the treasury strategy operating independently of those tariffs?

Yes. Thank you for that question. So to the extent that our company, Consensys, is deeply expert in the Ethereum protocol. On Layer 1 execution, Layer 1 Consensys and deeply expert in Layer 2, zkEVM protocol technology in the form of linear. And to the extent that personnel in our protocols teams, our Linea team, our MetaMask's team are constantly in contact with not just if they're on foundation researchers and other personnel and other leaders across the ecosystem regarding the advancement of the protocol, and we have contributed I think second only to the Ethereum foundation in terms of advancement of the protocol.

We certainly believe that we have if not an advantage, at least we are deeply aware of what's going on in the ecosystem and able to shape it for the benefit of the ecosystem, which is really all about maintaining rigorous decentralization, credible neutrality, sensorship resistance. So the stronger Ethereum is, the more it will continue to win. And Sharplink is 100% dedicated to the health of the Ethereum technology. And we believe that Sharplink shareholders will benefit from that perspective.

Our next question comes from the line of Devin Ryan with Citizens Bank.

First question just on at kind of price. A lot of the price action still feels dominated by positioning macro flows. And it's a question I asked frequently, just when we'll see correlations break down where everything doesn't just trade with Bitcoin's price. And I'm curious if there's a threshold that you're thinking about where fundamental ETH demand becomes large enough to offset some of the speculative flows around the edges that are obviously impacting price?

And are there any metrics of kind of real demand that you would kind of point out as key indicators that we should be tracking? And then just how does that inform kind of the treasury management decisions as well?

Sure. Thanks, Devin. We recognize that, first of all, ETH is very volatile. It's actually a feature of this asset class. For a long time, ETH traded pretty linearly uncorrelated with Bitcoin. We are seeing more correlation actually with macro factors than we had in a long time. And obviously, we're going through a period of deleveraging since October 10, and that typically takes months or even up to 2 quarters to work its way through the system.

I think the leading indicator we would ask our investors to focus on is that macro Ethereum adoption opportunity, what we like to call and others refer to as the super cycle. So there seems to be a bit of short-term divergence between the price of crypto and the adoption that we're seeing. I feel pretty strongly that we've never had a period of time in the history of crypto, where institutions are more attuned, institutions are allocating. No longer experimenting in the Ethereum ecosystem.

Joe laid out in his introduction, just a handful of institutional use cases. We're seeing it across stablecoin growth where most of the stable coin activity is happening in the Ethereum ecosystem by a large margin relative to the next two largest blockchains. Second is we're seeing tokenization at what I think is a very, very early stage of a step function shift. Historically, we've seen individual funds, individual tokens, be tokenized on disparate platforms. Now we're hearing about the largest asset managers essentially saying that they have plans to tokenize all their assets.

So I think we're looking for signals, but they're loud and clear that we're talking about potential tokenization of fund complexes. And the reason why that matters is Ethereum is the leading ecosystem for tokenization. And the final thing is DeFi, what we like to refer to as good DeFi or institutional DeFi, we're starting to see larger and larger institutions start participating.

And all of this bodes well for the Ethereum network for activity for total value locked and that should benefit the price of Ether. That said, we're not in the business of calling bottoms. We're not in the business of making price predictions but the macro tailwinds are stronger than we've ever seen, despite the short-term volatility and price consolidation.

So we don't drive our business model based on the price of ETH, we just wake up every day trying to give our investors smarter beta exposure to the price of ETH, and then we make it productive in what we think of as almost an alpha overlay strategy being more productive than retail investors can do themselves or that they can achieve through exposure for example, through an ETF.

That's great color. As a follow-up, I just want to hit on kind of yield above kind of native staking. You guys, in the prepared remarks, outlined some of the focus areas and kind of action plan, can you just give us a sense of how we should think about kind of the yield stack evolving through 2026? I don't know if there's a way to kind of quantify the different buckets and kind of orders of magnitude?

And then just interrelated, you spoke about potential partnerships that you're working on. How could those also help accelerate the strategy there?

Sure. It's a great question. And I think we want to be a little bit more transparent now that our strategy is growing and maturing. So I would say that native staking of our ETH remains our baseline. And I think we've said publicly multiple times since inception in June, we've been staking nearly 100% of our ETH because if you have a productive asset like ETH, it's respectful to investors to stake as much as you can. And not all of our competitors have been doing that.

Beyond that, we've selectively deployed some of our ETH capital into institutional grade structures. We shared that publicly that we did a large $200 million deployment from our balance sheet into a partnership with Consensys, their Linea blockchain and 2 blue-chip DeFi protocols, ether.fi and EigenCloud in order to be able to deploy permitting capital, meaning provide liquidity and protocol commitments for a multiple year periods. You get the liquid retaking rate, but on top of that, you get economic incentives denominated in ETH, and we didn't have to compromise on operational risk we were one of the first public companies to deploy into DeFi within our regulated qualified custodian at Anchorage.

I think as we think about 2026, we are going to move a little bit further along the efficient frontier to drive additional yield for our investors. But we do it through 4 lenses. First is we always look at counterparty risk controls. Which is really, really important in the crypto ecosystem. We look at how we can maintain operational protections through our regulated custodians. We look at liquidity parameters of the partnership or protocol, and we always look at regulatory consideration.

So again, no matter what the staking yield is, it's our hurdle rate. And our objective is to generate yield on a risk-adjusted basis above the native staking rate in a very disciplined, risk-adjusted manner. And you'll see we will be doing more partnerships in the ecosystem because we have something quite rare in the digital asset space, which is permitting capital and will make it useful on behalf of our investors. That actually is our comparative admission.

Our next question comes from the line of Brian Kinstlinger with Alliance Global Partners.

Can you talk about the pipeline of the yield generating deployments and partnerships and help us understand the time it takes to do due diligence on the associated risks?

And my second question, which is related, does the pressure on ETH make these types of deals more or less attractive to either side of the transaction? Or does it have no impact on demand for such transactions?

Sure. So we have built an internal team that has both investment management capabilities from both traditional finance and digitally native members. We have a DeFi team who's focused on sourcing these opportunities. And I would emphasize what Joe Lubin said earlier, many of these opportunities are being sourced in conjunction with our strategic partners at Consensys. They the deepest access to these protocols.

We are looking at, I would say, almost a dozen different protocols and opportunities, and it takes at least a couple of months to do the proper due diligence. First is you need to get comfortable that they have the risk controls that you would expect. We diligence things like smart contract risk, counterparty risk, liquidity risk, sometimes depegging risk, then we get to the point where we feel comfortable and you negotiate commercial relationships to try to leverage our scale and permitting capital to get a better yield or return on a risk-adjusted basis.

And then finally, we often work directly with our custodians to see if they can support it within the qualified custodial wrapper. And it's important because in crypto, where there's heavy risk in DeFi protocols, if you can reduce your custody and operational risk, we think of that as ops alpha. So that is question number one.

Question number two is, I mentioned earlier, the rate of return on staking will vary over time. You're seeing a very large rush into staking with staking rates higher -- sorry, staking utilization rates higher than we've seen in most of the history of Ethereum. That's because of the debts and the ETFs. But again, that is our hurdle rate. And our ability to generate returns are less sensitive to short-term movements in the price of ETH or staking rates. Because we're negotiating and deploying under a multiyear agreement. So we're making a lot of progress, but we're going to do it in a very disciplined manner. That's who we are and that's our strategy.

And let me add -- let me add to that, that I didn't mention DeFi that much in my previous response, not only are some of the best mines in DeFi in Consensys available to Sharplink, but some of them have actually moved over from Consensys to Sharplink.

Our next question comes from the line of Gareth Gacetta with Cantor Fitzgerald.

Can you provide any color on the difference in staking yields you guys earned in the fourth quarter between native and liquids taking more specifically, just how much greater is the liquid staking yield on top of native staking?

We haven't yet disclosed that. And part of the fourth quarter was still in deployment. And we've also been, in many cases, renegotiating our staking rates and incentives. So I don't have those numbers at hand. I think what you're going to see is later this year as we reach a steady state we will likely start disclosing more frequently, how we're doing in terms of our overall portfolio, staking, liquid restaking, Linea and any other capital allocations. Because we do think of it as a portfolio of returns.

Great. That makes sense. And kind of a follow-up to that. Could you maybe talk about the willingness to explore DeFi opportunities on the ETH Layer 1 itself versus Layer 2s, like Linea, going forward?

Well, I think today, most of our state [ Ds ] is done through Anchorage and done through Coinbase on a delegated basis, and they use a series of validators that are diversified and a series of validators that are generating optimal yield. And that happens to my knowledge, largely on main net, but we're very flexible whether it's the Layer 1 or Layer 2 in order to achieve the highest risk-adjusted returns.

And as Joe mentioned earlier, we are starting to see really good opportunities in DeFi but we're being patient and doing the proper due diligence because it does introduce risks beyond the native staking. And we're thinking of this as a portfolio of allocations and we're trying to push the efficient frontier, but to do so in an institutional-grade manner.

Our next question comes from the line of Joseph Vafi with Canaccord Genuity.

Just thought we'd double-click on clarity what it may mean for the broader ecosystem? I know you mentioned it, but just maybe we drill down on it a little bit and how maybe that evolves post-Clarity. And I know you I know it's super early that you did mention AI and the like. We're just wondering if you're seeing any pilot projects related to perhaps AI entering into maybe DeFi or are there more permissionless payment schemes or algorithms?

Sure. I'll take the first question, which is regulatory clarity, and then I'll pass it over to Joe Lubin to handle the Agentic dimension and how we're seeing it evolve.

On the regulatory clarity, I think if we look back, the Genius Act was a very, very good step, not only a good step in clarifying stablecoins in the U.S. I think it was setting off a bit of a geopolitical race because we're starting to see countries around the world focus on locally denominated stablecoins.

And the growth in stablecoins from what today is around $310 billion to what Secretary Bessent thinks will be several trillion over the next few years is going to happen not only in the U.S. It's going to happen globally. And we're seeing that in Korea, we're seeing it in Japan, we're seeing it in Hong Kong, and, to a lesser extent, in Europe. So that is one set of drivers.

I would say the Clarity Act, which is trying to provide both market structure and token security classification, is important as much as a signal as it is to make sure that institutional investors are comfortable that when they invest in crypto, they have the regulatory clarity behind them.

And I won't predict whether the Clarity Act will pass before the midterms. I think there's a high level of confidence it will pass this year. I do have pretty strong conviction that even in the event it does not pass. We've heard from both the SEC and the CFTC, the two primary U.S. regulators that they're not only saying they're working in unison, they put working groups together, and if necessary, I feel confident they can do through rulemaking what the legislative branch has not been able to accomplish yet.

So I think we have institutional adoption tailwind, and I believe we have regulatory tailwinds that are going to be very, very positive for both Stablecoins tokenization of traditional fund stock commodities as well as institutional participation in DeFi. We may need to be a little bit patient, but the trend is behind us.

And with that, I'll turn it over to Joe to speak a little bit more about what we're seeing in the Agentic economy on-chain and specifically what we're seeing in Ethereum.

Thanks, Joseph. Thank you for the question. There is just so much to discuss at the intersection of AI and crypto. I'll try to keep it fairly short. But the bottom line is that AI and crypto, at least in my opinion, badly need each other. These are two foundational technologies that could each reformat society alone. But we should recognize as a society as technologists, what I think of as the necessary complementarity of decentralized trust as represented by blockchains and the unprecedented centralized intelligence power and control that AI enables the crypto space.

And I think most of the initiatives coming more from the crypto space than the AI space, although there's certainly a lot of AI researchers that think about decentralization. But the crypto space will empower a healthy evolution of human and machine intelligence and economic and financial agency. But it needs, in my opinion, it really needs AI to fully flourish.

The world needs decentralized protocols and decentralized infrastructure to empower humans and communities with full agency. And these humans will be bonding deeply with AI to ensure that hopefully, AI will be user-centric and not continue in the exploit of toxic directions that Web2 plus AI has become.

So crypto will fix AI's centralization problem by providing decentralized compute data sourcing, training and inference on decentralized physical infrastructure networks are DePIN via Zero-Knowledge proof technology, crypto able secure data and private data markets through federated learning and Zero-Knowledge machine learning. AI can be treated on sensitive proprietary data without ever exposing the underlying information. We at Consensys are doing work with the x402 protocol, enabling micropayments for agent-to-agent, commerce and human to agent commerce.

We've participated in building EIP-8004, which is essentially a registry system for agents to register themselves and their capabilities and reputation systems that people, companies and agents can feed back on how the agents are doing. And AI fixes what we could think of as crypto usability problem. So we're moving to intense based user interface and user experience. And that means that AI will help us by explaining and handling complex, highly technical blockchain transactions and do so in natural language.

Users can simply say or type what they want to achieve and their AI agents, which might be there their digital twin, we'll be able to translate that and execute it for human. AI will help transform crypto-wallet into neobanks and intelligent financial advisers that you fully own and control and these wallets lot are users from security risks.

So I can go on and on, but let me leave it there. Maybe the last thing to add is that the AI-enabled velocity of software development is off the charts right now, and it's accelerating. So for instance, developers at Consensys and across the term ecosystem are putting 2x or more speedups in software development velocity. So look for that to continue and look for the quality of software to improve.

Our next question comes from the line of Kevin Dede with H.C. Wright.

Thanks for having me on the call. I know Joseph, you offered a little color on the Consensys partnership and then Consensys people joining your staff and working with ether.fi and EigenCloud. I was just wondering if you could kind of break down how you're approaching DeFi, some broad brush strategically given partnerships and internal personnel. And then specifically, how are you leveraging liquid versus rack?

Sure. I'll take that. So there's a word in crypto that's used quite often, which is composability. And when we approach partnerships it's often not to a single protocol. The example we gave was working with Consensys, their Layer 2 zkEVM chain as well as to blue-chip DeFi partners. I think that's a model that is repeatable. And the reason why we're seeing that is a lot of crypto and protocols are starved of liquidity, especially since October 10, and what they're looking for is an ability to have permitting capital.

The crypto ecosystem often is plagued with folks that will put money in protocols essentially try to generate as much quick yield, whether in token value or otherwise, and then they move on from protocol to protocol. So what we're seeing is a lot of demand from DeFi protocols for multiyear permitting capital deployment and they're willing to pay Consensys to do that. We are being approached by virtually every sophisticated DeFi protocol, vault provider to try to find ways to partner and that actually puts us in a pole position. And I'm quite confident that over a period of time, we are building a portfolio that is actively managed, which is in contrast with how individuals or ETFs can give exposure to eat productivity.

And I think that will be very, very positive for our investors. And I think it's less around standard staking, liquid re-staking. It's more the composability of bringing partners together to look at yield opportunities less around the wrapper, more about risk-adjusted returns. And we will try to be as public as possible when we enter into these partnerships because that is our comparative advantage.

So it's less about the wrapper. It's more about the risk-adjusted return and how each one of these deployment fits into a diversified portfolio management or portfolio allocation framework. So it is a portfolio of capital, and we're going to deploy it to our comparative advantage. And if you do that right, it's really respectful and beneficial for our investors.

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr. Chalom for any final comments.

Well, before we close, I want to emphasize that we are building Sharplink for a world where Ethereum is at the core of the future innovative financial infrastructure. Our job is to be the stewards of our stockholders' capital and our ETH treasury with the north star that we say over and over to increase ETH per share responsibly. We believe Sharplink is the smartest way for investors to participate in this long-term Ethereum opportunity. And at our core, we are Ethereum there with an edge.

So thank you all for joining us today for your continued support and confidence in our vision and strategy. I'm really proud of the work our team has accomplished in 2025 and I'm optimistic and excited for the opportunities ahead in 2026. We look forward to speaking with you again on our next earnings call, and have a great day, everyone.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Good morning, everyone, and thank you for participating in today's conference call to discuss SharpLink's financial and operating results for the third quarter ended September 30, 2025. By now, everyone should have access to the third quarter 2025 earnings press release, which was issued yesterday afternoon at approximately 4:05 p.m. Eastern Time. The release is available in the Investor Relations section of SharpLink's website. This call will also be available for webcast replay on the company's website. Following management's remarks, we'll open the call up for Q&A.

I will now hand the call over to SharpLink's Vice President of Business and Legal Affairs, Dodi Handy. Please go ahead.

Thank you, operator. Please see SharpLink's quarterly report on Form 10-Q filed yesterday with the SEC and the earnings press release, which crossed the wire yesterday afternoon. These documents list some of the factors that may cause the results of SharpLink to differ materially from what we say today and which identify some of the risks and uncertainties that could affect our business, prospects and future results. SharpLink assumes no duty and does not undertake to update any forward-looking statements. Any forward-looking statements made by us during this call is based only on information currently available to us and speaks only as of the date when it is made.

In addition, we may be discussing or providing certain metrics today such as ETH concentration that are not GAAP metrics. Please see our earnings press release and SEC filings for further information regarding these metrics.

To set the agenda for today's call, we will begin with SharpLink's Chairman, Co-Founder of Ethereum and Founder and CEO of Consensys, Joseph Lubin, who will provide a broader perspective on Ethereum's continued growth, institutional adoption and the evolving regulatory landscape shaping the digital asset economy. Next, Co-Chief Executive Officer, Joseph Chalom, will discuss SharpLink's progress and execution of its ETH treasury strategy, highlighting key achievements from the quarter and our areas of primary focus in the quarters ahead. Then Rob Phythian, Co-Chief Executive Officer, will share an update on SharpLink's affiliate marketing business. He'll then be followed by Chief Financial Officer, Bob DeLucia, who will be recapping the third quarter 2025 financial results and key performance metrics related to SharpLink's ETH strategy.

I would now like to turn the call over to SharpLink's Chairman of the Board, Joseph Lubin. Joe, the floor is yours.

Thank you, Dodi. Good morning, everyone. I am the Chairman of SharpLink and as many of you know, also a Co-Founder of Ethereum and the CEO and Founder of Consensys, a leading Ethereum software development company. Consensys is SharpLink's strategic adviser, offering support across a broad range of topics from product collaboration, market education, protocol due diligence and more. The strategic connectivity between Consensys and SharpLink gives SharpLink stockholders unique competitive advantages relative to other ETH digital asset treasuries. Stockholders are starting to see early examples of this, such as the staking collaboration between Consensys and SharpLink that we announced in October to provide enhanced levels of risk-adjusted yield on a portion of our ETH capital.

Beyond this unique partnership, we're seeing incredible tailwinds that I can only describe as a massive acceleration of an institutional adoption super cycle. Wall Street and other institutions, including our own government in the U.S., are fully embracing the Ethereum opportunity. Just over the past few months, we've seen major accelerants to this adoption.

These include the SEC's project crypto announcement to support bringing capital markets on chain as a national competitive advantage, the passage of the GENIUS Act to create a regulatory framework for stablecoin adoption, JPMorgan announcing that they will allow institutional clients to use their Ether holdings as collateral for loans, governments in Japan and South Korea announcing the launch of their local currency-denominated stablecoins on Ethereum, where the bulk of the global stablecoin activity resides. Alibaba announcing the launch of their Layer 2 network built on Ethereum. At their Sibos Annual Meeting 5 weeks ago, the Swift CEO announced as a focus of his keynote that they are working with Consensys to build the Swift ledger using Linea, Consensys' Layer 2 Ethereum technology.

It was clear to everyone at Sibos that traditional finance was now moving rapidly to onboard itself onto Ethereum and various aspects of decentralized finance. And in parallel to Swift's adoption, the DTCC and other central securities depositories around the world, major stock exchanges and banks like JPMorgan and Deutsche Bank are just a few of the major financial institutions that are building on Ethereum.

I will restate our long-term thesis. Ethereum is becoming mainstream global trustware, a new kind of software platform that eliminates some traditional risks and inefficiencies and guarantees execution as advertised. And Ether is the institutional-grade trust commodity that is powering transactions, agreements and systems on the next-generation financial infrastructure. Ethereum continues to extend its massive lead in the smart contract platform space as Ethereum dominates the flows across stablecoins, tokenized real-world assets and high-quality DeFi liquidity. This institutional adoption super cycle is underway, and it is now finally supported by our regulators.

Joseph Chalom and I both attended and presented this week a very high-quality Cantor crypto event organized by Cantor Fitzgerald. It brought together many of the leading U.S. regulators and legislators with top-tier founders, C-suite execs and investors for a wide range of presentations and discussions. The institutions are present in force and accelerating their activities in the Ethereum ecosystem.

Ethereum has done the hard part, implementing the strongest security, attracting the most validators and the largest developer community while maintaining the most rigorously decentralized network, all with a track record of 100% uptime for over 10 years since inception. This has resulted in Ethereum becoming the home of most of the DeFi liquidity in the ecosystem. Now to support institutional adoption and high transaction volume, in addition to the massive scaling provided by the Ethereum Layer 2 networks, we're witnessing step function improvements in Ethereum's Layer 1 mainnet transaction throughput, scalability and efficiency.

Further improvements are coming with Ethereum's Fusaka upgrade in December, which will unlock even further much more regular parallel scaling upgrades to support the growing demand from institutions to drive transactions and value on Ethereum's mainnet, which SharpLink are executing in anticipation of a future where Ethereum becomes the settlement layer for trillions of dollars in tokenized assets, real-world instruments and on-chain liquidity, increasing ETH per share for our investors.

As a co-founder of Ethereum, I've witnessed great cyclicality and volatility in the price of digital assets, including ETH. It should not distract us from the secular paradigm shift that is now going mainstream. SharpLink is perfectly positioned to build value for shareholders at the confluence of technological scaling and maturity, regulatory clarity and institutional adoption of Ethereum.

I'd like now to turn the call over to our Co-Chief Executive Officer, Joseph Chalom, to walk through how we're positioned during this important moment in the Ethereum journey and share our third quarter operational updates. Joseph?

Thank you, Joe, and good morning, everyone. To begin, I'd like to share that we are really pleased with the results of this quarter, our first full reporting period since we launched our Ethereum treasury strategy. We'll talk through our Q3 financials in more detail later, but I want to highlight 2 very positive points.

First, we delivered approximately $10.8 million in total revenue, up over 10x year-over-year as a result of our best-in-class treasury management and staking nearly 100% of our ETH. Second, we delivered net income of approximately $104.3 million, largely driven by gains in our Ethereum holdings. These results demonstrate the strong momentum we're seeing across our business. particularly as institutions continue to build on and engage with the Ethereum ecosystem amid a new era of regulatory clarity.

What was once viewed as a major barrier to institutional participation has now been lifted with the digital asset industry gaining clear recognition and support from the U.S. government. It is not a coincidence that we're seeing a major inflection point for institutional adoption of digital assets and decentralized finance. Wall Street and governments globally are recognizing the power of stablecoins to facilitate nearly instant movement of value at no cost. The largest banks and asset managers are deploying on chain and announcing road maps for the tokenization of real-world assets. This unlocks a new frontier of distribution and capital efficiency for investors. And we're also seeing institutions, including SharpLink, access high-quality DeFi for borrowing, lending and other financial primitive.

Given the history, security, trust and liquidity on Ethereum, it not only has the license to win, it is winning the predominance of this institutional activity. For this reason, we're building a SharpLink team capable of fully capitalizing on this paradigm shift. I'm really proud that we've been able to attract some of the brightest talent in our industry to our senior executive team, giving us greater institutional experience and expertise. Matthew Sheffield joined as our Chief Investment Officer from FalconX, where he served as the Head of U.S. Spot Trading and previously worked at Bridgewater Associates.

Mandy Campbell joined as Chief Marketing Officer from Bain Capital Crypto, where she led marketing for the firm's dedicated digital asset and early-stage venture funds and previously built brands for companies like GitHub and Facebook. And Michael Camarda joined as our Chief Development Officer from Consensys, where he led corporate development. He previously worked at JPMorgan across investment banking and strategic investments.

Leveraging our expertise and strategic partnership with Consensys, our team is laser-focused on identifying the best ETH deployment opportunities and ecosystem partnerships to maximize value creation. Since we initiated our Ethereum treasury strategy in June, we have staked nearly 100% of our ETH. This is in contrast with many of our peers and with the ETH ETFs. We're earning real on-chain yield through native staking and liquid staking protocols.

More recently, working alongside Consensys, we announced we will deploy $200 million of ETH onto its Linea Layer 2 platform in partnership with EigenCloud, ether.fi and Anchorage Digital Bank. Our scale and permanent capital base allows us to structure multiyear deals that generate yield and economic incentives that materially exceed the standard Ethereum staking rate. Importantly, we're accessing DeFi level yields while carefully managing our risk, including ensuring that this deployment and custody is maintained within Anchorage, one of our qualified custodians.

Yield opportunities like this are generally not available to individual investors or passive ETFs and highlight the enhanced value that our actively managed treasury can generate for our investors. As part of our mandate, we've been proactively sharing our long-term vision for Ethereum's role in global finance to both retail and institutional audiences. A central element of our Ethereum adoption thesis is that most financial assets, including funds, stocks and bonds will be tokenized. This means that ownership of these assets will be represented in a digital token format on the blockchain.

We're not alone in this view. Just last month, Larry Fink, the CEO of BlackRock, shared his vision that all assets will be tokenized on chain to drive both efficiency and accessibility for investors. At SharpLink, we're not a passive observer of this paradigm shift. We're helping usher it in. In September, we announced a partnership with Superstate, a digital transfer agency to become the first public company to natively issue its stock on Ethereum. The intent of this innovative partnership is to increase both accessibility and on-chain utility of our public equity for the new digitally native investor base. We're actively working in the ecosystem to ensure there are market participants which can support this innovative new financial standard and primitive.

It's important to acknowledge that like others in our space, SharpLink share price has experienced periods of volatility. That's expected given our exposure to our reserve asset, ETH, which is volatile. What's important is that we've grown our total ETH holdings significantly over the past quarter and doubled our ETH per share concentration from 2.0 to 4.0 since the inception of our ETH treasury strategy in June.

As we have shared in the past, SharpLink is relentlessly focused on shareholder value and ETH per share accretion. We have built a team that is well positioned to navigate these volatile markets. We have the expertise and agility to take advantage of the right capital market opportunities with a strong balance sheet as our foundation. Our digital asset treasury structure gives us flexibility to make strategic decisions for the benefit of our investors.

Speaking on capital markets specifically, when our multiple to NAV is above 1, we have the ability to issue new shares and purchase ETH. This is immediately accretive to ETH per share. When our multiple to NAV is below 1, we can raise capital to fund share buybacks. We can do this by monetizing our volatility through convertible bonds or other equity-linked structures, and we can utilize a portion of the $3 billion of ETH on our balance sheet as collateral to borrow capital. In either of these scenarios, we're able to execute transactions that are accretive to stockholders and increase our ETH per share concentration.

I want to share just one example of where we found an innovative opportunity to raise capital. In October, we raised $76.5 million through a registered direct offering priced at a 12% premium to our then market price and a premium to the net asset value of our ETH holdings. This novel transaction paired an equity sale with a short-dated premium purchase agreement, enabling us to issue stock to a high-quality institutional investor interested in gaining upside exposure via this unique structure. This deal reflects the strong institutional confidence in SharpLink's strategy and long-term vision.

By raising capital at a premium, we continue to expand our ETH treasury and increased ETH per share for our stockholders. Beyond innovative treasury management, we do not have an exclusive multiyear asset management agreement in place like other treasuries. We manage the vast majority of our assets through our in-house team of institutional experts from both crypto and traditional financial markets. This allows us to raise capital, acquire ETH and maximize its productivity through in-house active management, allowing more of this value to flow to our stockholders. Together, these factors place SharpLink in a distinctly advantageous position to capitalize on the institutional adoption super cycle now unfolding across the Ethereum ecosystem.

In closing, our third quarter earnings results mark a proof point that SharpLink's Ethereum treasury model is indeed working. Our mission is to give investors the smartest and most efficient way to benefit from the long-term Ethereum opportunity. We have built what we believe is the most innovative Ethereum treasury company, providing stockholders with institutional-grade, risk-managed exposure to ETH and its yield.

With that, I will now turn the call over to my partner, Rob Phythian, to provide an update on SharpLink's Affiliate Marketing business. Rob?

Thanks, Joseph, and good morning, everyone. With the shifting of SharpLink's focus and management resources towards execution of our ETH treasury strategy, we reduced emphasis on expanding our Affiliate Marketing business. Nonetheless, this segment continues to operate steadily, providing a modest source of revenue through our performance marketing and player acquisition services.

For the 3-month reporting period ending September 30, 2025 and 2024, revenue declined to approximately $570,000 from $882,000, respectively. Our 2025 consolidated net loss from continuing operations improved with losses declining to approximately $1,800 compared to a consolidated net loss from continuing operations of $781,000 for the same 3 months in 2024. We are very pleased that our affiliate marketing segment is holding its own and operating efficiently as part of a broader business platform.

To provide you with greater insight and perspective on SharpLink's third quarter financial results, I'll now turn the floor over to Bob DeLucia. Bob?

Thank you, Rob. I'll begin by encouraging everyone listening today and those who have read our earnings release to review our quarterly report on Form 10-Q for the period ended September 30, 2025, which we filed yesterday afternoon with the SEC. The 10-Q provides detailed disclosures and footnotes that complement today's discussion, offering stockholders and investors a comprehensive view of SharpLink's financial position, liquidity and each treasury performance metrics.

We will now go through the financial results for the quarter ended September 30, 2025. As we review our third quarter income statement results, I'd like to remind everyone that all comparisons and variance commentary refer to the prior year quarter unless otherwise specified. As of September 30, the company held 580,841 ETH with a net fair value of $2.4 billion. In addition, we held 236,906 LsETH or liquid state ETH with a net cost value of $622.7 million. Subsequent to the end of the quarter, our combined ETH holdings have continued to climb, standing at 637,752 ETH and 223,499 LsETH for a total of 861,251 as of Sunday, November 9, 2025.

Revenue in the third quarter increased to $10.8 million compared to $0.9 million in Q3 of 2024. The increase was due to the success of our ETH staking strategy during the third quarter. I'd like to point out that our income statement now reflects a section presenting other operating income resulting from our ETH holdings. We believe this presentation of our income statement provides our stockholders, investors and the general public with greater clarity and ease of understanding our results when reading our financial statements.

SG&A expenses in the third quarter were $12.4 million compared to approximately $709,000 in Q3 of 2024. Net income for the third quarter increased materially to $104.3 million compared to a net loss of $0.9 million in Q3 of last year. The significant growth in net income was primarily driven by $107.3 million unrealized gain related to fair value accounting adjustments on our ETH holdings. We also had a realized gain of $6.3 million from the conversion of ETH to LsETH and a noncash impairment charge of approximately $7 million due to the lowest intraday market price for LsETH during the third quarter.

As of September 30, 2025, cash on hand was $11.1 million compared to cash on hand of $1.4 million as of December 31, 2024. Additionally, at September 30, 2025, we held $26.7 million in USDC stablecoins as a financial asset.

For additional details, our complete official financial statements and accompanying footnotes including all required disclosures and management's discussion and analysis are contained in our quarterly report on Form 10-Q for the period ended September 30, 2025, filed with the SEC.

This concludes our prepared remarks. We will now open it up for questions from those participating on the call. Operator, back to you to provide instructions for those who may have questions for management.

[Operator Instructions] Our first question comes from the line of Devin Ryan with Citizens Bank.

First question is probably for Joseph Lubin. I'd love to dig in a little bit just on kind of the Ethereum growth and particularly Linea because it just -- it seems like a ton of momentum there, and I know that can kind of trickle down into more activity here. And so huge wins like Swift. And so I'd love to just hear about what the attributes are that are driving that demand from partners? And then also, if you can just talk a little bit more about what the pipeline there looks like and any color around kind of the details of the pipeline, if you can, just in terms of what the use cases are and what most people are interested in?

So the general answer is that the institutions are finally here that financial institutions and other enterprises have recognized that digital assets are an incredibly important technology that decentralization is a direction of travel for not just the financial industry, but for the Internet and the web itself. Ethereum has executed its roll-up-centric road map for scaling and executed it remarkably well. So we have a lot of scalability capacity that has come online and much more coming nearly every day.

We are focusing on making operations more interoperable across the different networks and down to the Layer 1, even while we scale Layer 2s with enhanced BLOB, binary large object access and scaling Layer 1 as well. The Fusaka upgrade will do great things for both of those. And the Glamsterdam upgrade, hopefully, somewhere around 6 months later, will, in particular, concentrate on Layer 1 scalability. We've also decoupled the ability to upgrade BLOBs and gas limits from the traditional upgrade cycle. And so we're going to be able to accelerate both of those.

Linea is particularly exciting because it is the only Layer 2 technology, zkEVM technology that is 100% compatible with Ethereum Layer 1. Additionally, it's making use of ether for fees on that network and on subsequent implementations of the Linea technology and is burning both Ether and Linea as we speak, contributing to the financial health of the mothership Layer 1.

We -- I can't announce too much about what we're launching in the near term on Linea. And the Swift project itself is going well. We are on track to build the prototype that has been articulated. And other financial -- systemically important financial institutions are also building on Ethereum technology. We've seen actual launches from DTCC. There are other ESDs around the world that are making use of Consensys' Ethereum technology. Major stock exchanges have announced that they are tokenizing stocks on the Ethereum technology and consensus Ethereum technology and major banks are also doing the same thing. I leave it there.

Yes. No, I appreciate all that detail. And then just one on SharpLink and kind of the broader strategy as we look into 2026, and I appreciate there's a number of variables that probably go into this. But how do you think about what percentage of ETH over kind of the intermediate term should be staked versus could be applied to enhance yield or operating earnings in other ways for the business? And so is there a percentage? Or how are you thinking about that? And then as we think about kind of intermediate term, the incremental spread that you think your team can generate above and beyond what someone can get as kind of just a staking yield as they're an active owner of ETH?

So Devin, I'll take that. This is Joseph, and thanks for the question. I think there's 2 ways to answer it. Given ETH is a productive asset that you can stake, restake and gain yield, as a treasury, our first responsibility is to provide that yield. So I just want to say we have been staking nearly 100% of our ETH since the inception of our treasury strategy as a responsibility and as a steward of that.

Second is we don't provide guidance on the specific yield we expect to achieve from our staking and restaking opportunities. But what we will say is we are focused on a risk-adjusted yield. There may be people who swing for the fences and seek very high DeFi level yields. You would have seen our Linea and Consensys announcement just last month, where we're deploying about $200 million of our ETH -- from our ETH Treasury in a collaboration with ether.fi, Eigen, Linea and Consensys. And in that case, we're investing in a liquid restaking token, and we're getting enhanced yield without taking enhanced risk because of economic incentives from some of our collaborators and partners.

So I think what you'll hear from us is we're going to take an institutional approach to how we stake. We're going to stake nearly 100% of our ETH and seek the best risk-adjusted returns, which you can do given the scale of us being the second largest corporate holder of ETH. So we're going to participate in the ecosystem. We're going to get that yield.

The one thing we've highlighted is that this unique yield opportunity in this collaboration is still being risk managed and the liquid restaking token is sitting in Anchorage our qualified custodian. So you could think of us trying to get the best risk-adjusted yield, but we won't give a target on the spread. We will do the right thing and focus on risk management and get those best opportunities for our investors that the average retail investor cannot achieve and that an investor in an ETH ETF cannot achieve either.

And let me also emphasize that it is the relationship, the close relationship between SharpLink and Consensys that enabled us to configure a yield situation that was significantly above the staking -- the regular staking yield without increasing any risk above what one would normally do in the vanilla case. And that was directly due to the Linea relationship.

Our next question comes from the line of Brian Kinstlinger with Alliance Global Partners.

Great. As a follow-up to those questions, can you speak to the pipeline of other capital deployment opportunities? And will there be competition with some of the larger ETH holders as well? Or do you think some of these opportunities are exclusive to SharpLink?

I can take that one. Thanks, Brian. We are looking and surveying the entire ecosystem for opportunities, staking, restaking, liquid staking, potentially borrow and lend with our ETH in the DeFi ecosystem. That said, we've hired a really expert team with both crypto and institutional experience that is focused not only on those enhanced yield opportunities, but what are the inherent risks. And we are right now in the midst of doing a survey of the entire ecosystem for these yield opportunities.

The Consensys Linea announcement was the first in what I would expect would be more innovative announcements. And what's interesting being a large corporate holder of ETH is that we view our ETH as permanent capital. And what that means is as we approach the ecosystem, many of these ecosystem protocols are very, very interested in not only having us stake our ETH with them, but to commit to a multiyear staking relationship. And others have a very difficult time doing that, whether you're a retail investor, whether you're an ETF manager because of the daily liquidity that you may need.

So when we approach the ecosystem and are willing to provide multiyear commitments, we are seeing that they are very eager to provide enhanced incentives for that locked TVL or total value locked. So we're still surveying. You will see, I believe, additional announcements later this quarter and in quarter 2. But we're viewing it essentially as a portfolio of staking. And as an institutional investor and steward, we are looking at the efficient frontier of opportunities. And that's how we're approaching it, like a great steward of institutional capital for our investors.

Great. And then maybe for Joe Lubin, we hear a lot about Agentic AI and autonomous digital commerce. How do you feel Ethereum is positioned for this trend compared to other chains? I know it sounded like the Osaka upgrade definitely improves the positioning, but maybe I'd love to hear your thoughts.

Yes. So we at Consensys and across the Ethereum ecosystem are very excited for our Agentic future, our hybrid human machine intelligence future. The Ethereum Foundation itself has been doing some outstanding work in figuring out the many ways that we in the ecosystem can support Agentic AI. Consensys itself has been doing some of the same. Marco De Rossi, Consensys has been working with the Ethereum Foundation and with Google to pioneer ERC-8004, which is essentially a registry for Agentic AIs to register their capabilities, be accessible by other agents or other software humans. So it's useful for discovery, and it's useful for reputation as other agents or humans can provide feedback on the registry regarding their results with respect to certain characteristics that have been published in the registry.

Linea is going to be a very welcome home to agents. And another interesting element that I think has the potential to transform how we interact with the web quite significantly and how Agentic AI interacts with other Agentic AI is x402, the Internet and web was built without native money, native payments. and also native identity, that's a different topic. Essentially, x402 is going to enable first a holy grail, the holy grail of micro payments that makes sense to make use of because Ethereum is very inexpensive right now and getting more inexpensive to do transactions and the Layer 2s are very inexpensive.

And so it's starting to make sense to be able to pay subsecond fees for accessing data and other kinds of services on the Internet. So you can imagine as the web evolves, APIs can be wrapped in x402 and agents or people can ask for data, receive a price, pay that price and be able to access what they want from a website without having to sit through all the advertising that is currently saturating the worldwide web.

And Brian, I would just add what Joe was describing is a massive future opportunity and use case on the Ethereum network. And that will drive more usage of Ether as the native token securing it. And that's why we believe there's a long-term macro opportunity to own as much Ether as possible. And this Agentic AI use case is another tailwind for Ethereum, just like tokenized assets, stable coins and institutional adoption.

Our next question comes from the line of Fedor Shabalin with B. Riley Securities.

Good to see solid staking rewards contribution in 3Q revenues. And my question is about the current multiple to net asset value. The stock is trading at a discount right now. And could you provide any details on what initiatives you consider besides just share buybacks? Any color on your priorities here would be helpful.

Sure. I think we are going through a period, which we hope is temporary, where many treasury -- digital asset treasuries are seeing some compressed multiple to I do think it provides us with an opportunity to do 2 things, which are really, really important when you put shareholders first. We are set up to basically be able to deal not only with ETH price volatility, but even when our NAV is trading as a discount. Our goal continues to be ETH per share growth. And when our market multiple to NAV is above 1, we can issue equity to purchase more shares. When it's below 1, we can buy back stock. And you would have seen that in August, our Board approved a stock buyback program. And both of these actions are accretive. So in this space, volatility can become an opportunity to capture value and not always a constraint.

I would also say that our decision framework, again, is rooted in ETH per share accretion and capital efficiency. We've built an incredible team of institutional experts who are constantly looking at opportunities both business development opportunities as well as capital market opportunities when we're in a period where our NAV is trading at a discount. We won't publicly disclose further details into our methodology for competitive purposes. But at the end of the day, we are focused on increasing ETH per share concentration, and we've disclosed that it's more than doubled from 2.0 to 4.0 through our disciplined capital management.

I appreciate the fact that we are in a position where we could raise capital in multiple ways. And when our multiple to NAV is below 1, we have to be careful in terms of how we can raise equity. But you would have seen the unique fundraising opportunity we took advantage of in October. And we are going to continue doing the right thing for investors, but with a focus on ETH concentration. Again, we are not providing guidance or detail on how we would execute on our capital market strategy or share buybacks at this time.

I appreciate this color. And my follow-up is -- has a macro nature, and this question is probably for Joe Lubin. Maybe many investors view of Solana as a competitor to ETH, citing its transaction speed and low cost as the key advantages. And how can Ethereum preserve its leading position in the face of this competition? And additionally, could you provide more details about ETH December upgrade and what the main updates will include just briefly, if you can frame it up.

Let me start with the second piece. Data availability sampling is one of the major upgrades, and that's going to enable nodes on the network to need to hold less data, but it will enable the amount of BLOBs or binary large objects to grow significantly. And there's also an upgrade that enables them to start to grow as a result of essentially something like monthly activity that called parameter-based upgrading. And so both BLOBs as well as gas limits will be upgradable on a very regular basis. So that's going to enable greater scalability at both Layer 1 and Layer 2.

Ethereum, the whole ecosystem is growing pretty dramatically in its scalability. And we already see networks on Ethereum that significantly rival or beat Solana's transaction throughput, a project that's coming online rapidly, Mega ETH operates at speeds that I believe are significantly in excess in terms of transaction per second throughput. The Solana numbers actually include in their transaction per second throughput, essentially their voting mechanism, which are not actual transactions initiated by users.

And so we'll see pretty soon the total transaction throughput of the Ethereum ecosystem eclipse what Solana is doing. And we have composability enhancements, which will enable transactions and operations across different Layer 2s and across Layer 1 to be very smooth and to have very low latency in between them. So we'll start to see applications being built that access multiple Layer 2 networks and Layer 1 in roughly the same operation.

And Fedor, it's worth noting that if you look at the most recent figures, stablecoins, which is probably the fastest-growing area of digital assets with over $300 billion, over 60% of all stablecoin activity is happening on Ethereum and its ecosystem. Ethereum has -- last time I looked, approximately 10x as much stablecoin activity as Solana. Over 80% of tokenized real-world assets, which we believe is going to be the next driver of growth is happening on Ethereum. And so we feel quite confident that institutional real activity is going to be dominated by the Ethereum ecosystem despite some of the marketing and prior hype around Solana.

Sorry, another important point to make is that many users don't need incremental transaction per second throughput. A lot of these networks are sufficiently capable of handling the volume. What a lot of the use cases do require is reliability and nothing comes close to the 10 years of uptime, noninterrupted uptime that Ethereum provides.

Our next question comes from the line of Kevin Dede with H.C. Wainwright.

Mr. Lubin, apologies for dragging you back over the upcoming upgrades. But I'm curious, given your insight, how you see them progressing? I know the merge pushed to the right on numerous occasions, and I'm wondering if in your negotiations with financial service institutions, whether or not that potentiality affects discussion of ETH versus Solana.

So in terms of being able to land upgrades on time, the Ethereum ecosystem has significantly matured on that front. The Ethereum Foundation is almost a brand-new foundation. It is firing on so many new cylinders and the level of breadth that it's addressing and excellence at which it's operating is incredibly exciting to all observers from deep inside the ecosystem and hopefully from outside of the ecosystem. So we're targeting more than one major upgrade to the Ethereum protocol per year, hopefully landing on an average of 2. And we're on track to accomplish that this year. We're looking like we're on track to accomplish that next year. We do expect after Fusaka, the Glamsterdam upgrade will probably land somewhere around 6 to 8 months after Fusaka lands in December.

And as I indicated before, we've decoupled a bunch of the upgrade trajectories from the main of a mean schedule so that we'll be able to upgrade the number of logs or binary large objects on their own pace, and we're going to be able to upgrade the gas limits on its own pace. And so we look to do a number of those decouplings in parallel developments over time. As always, when we do the work, we're doing the work for the next few major upgrades. These things take time, and we've got many, many teams on a number of different clients that are always working in parallel. And an upgrade kicks from the priorities that need to be addressed and the level of maturity of that thread to determine what actually ends up in an upgrade.

Also, yes, in terms of how financial institutions impact the Ethereum upgrade cycle, I would argue that financial institutions are starting to be a forcing function in what the Ethereum ecosystem considers necessary to include in the protocol. Things like enhancements to reduce the delays on the staking queue are a very important one that is being addressed, and we've written specifications to handle that and essentially solve that problem. But other than that, because of the roll-up centric road map, much of the activity of financial institutions will be landing at Layer 2s. Layer 2s have their own upgrade schedule and often their own technologies.

And so that sort of modularity enables the Ethereum protocol proper to have an upgrade schedule and activities that are decoupled from the needs of different institutions that are making use of the technology of Layer 2. So no delays would be caused by us paying attention to the needs of financial institutions and just improvements would be driven by that.

When you look at the entire Ethereum ecosystem and some of the large treasury companies evolving, I mean, I know you know them all, BitMine, yourself, ETHzilla, The ETH Machine, all accumulating massive amounts of the token. How would you recommend we look at the inflation characteristics of token issuance?

So I can jump in there. Joseph, do you want to start?

Joe, why don't you go on token inflation, and I'll chat about competition or what I call co-opetition.

Yes. So the Ethereum issuance schedule has expected inflation below 1% annually. I think it's a little bit below Bitcoins and massively below Solanas, which I think is -- I forget what it is, but it's probably in the range of 6% to 8%. Ethereum as it gets busier, burns ether with every transaction. We do issue ether to incentivize validators to build blocks. But you can expect that the max that could be issued in a year that if there's effectively no burning, I believe, is, I think, around 1.5%. And we're almost certainly going to be below 1%. I haven't looked recently, but my guess is it's probably around 0.7% or 0.8%. Please don't hold me to that.

And again, as the network gets busier and busier, we'll be burning more ether. We will move to net zero issuance when the network is really busy, and we'll move to being deflationary when the network gets very busy. And it's not just the Ethereum network Layer 1 that burn ether. Layer 2 Linea network is burning ether, and we look to see other projects taking up that mechanic and start burning ether as well on different networks. And so my colleague informs me that I was pretty close that median annual inflation rate is around 0.8%.

Remember.. Yes, it was deflationary after the merge for, jeez, I want to say almost a year.

For a while. Yes, exactly.

And Kevin, I just want to add from a SharpLink perspective, you spoke about some of our competitor or peer digital asset treasuries in the Ethereum ecosystem. We view that as actually very positive and a validation of the macro investment thesis that Joe and I have been speaking about. Co-opetition is actually very good. One of the most important things you've seen since the launch of this wave of digital asset treasuries in the Ethereum ecosystem since May and June is a complete change in the level of mind share and conversation, not only about Ethereum, but institutional adoption that's happening on Ethereum. And that mind share, I think, had been lost for a period of time to Bitcoin and Solana. And I think we've regained that whole position.

I would say we're trying to differentiate ourselves from our peers who we respect in a few ways. One is we are building, as I shared, the strongest in-house team with expertise to manage the vast majority of our ETH and ETH staking. And when you can do it on team, more of the yield inures to the benefit of our shareholders. So you're not paying out 1, 2 or even a higher percent of your NAV every year to third-party asset managers. We use them selectively.

And second is our team in conjunction with our advisers at Consensys we are going to be differentiating ourselves on yield generation and finding the best opportunities and to do it in a really risk-managed way because we have a team of experts along with Consensys who know how to do that. And we are going to be committed to the North Star, which is increasing ETH concentration and making sure throughout this process, even through volatility of the price of Ether that we're transparent, and we're always going to do the right thing for investors.

So we welcome the competition. It's a validation of the thesis. And I hope the entire industry does well because that will be really, really good for not only the Ethereum ecosystem, but hopefully for the long-term price of Ether, which secures the transactions on Ethereum.

Joseph. I appreciate the color. I was curious about the collective impact on token issuance and burn because, I mean, this is unprecedented in Ether's history to have such huge accumulation held in treasury versus necessarily working on the transaction side. But I appreciate the color. Thank you for that. On that note of working in-house, would that include at some point that SharpLink starts running its own validator nodes?

I think we started our ETH treasury strategy in late May, early June. You would have seen tremendous progress. staking nearly 100% of our ETH, accumulating over $3 billion of ETH, doing unique things in the ecosystem like our partnership and announcement with Consensys and Linea, the intent to tokenize our public equity with our collaboration with Superstate. We shared on previous calls that we are looking at what the future operating model can be and whether we will be doing things to operate companies.

I think watch for the future, but we don't have a comment on whether we're going to validate ourselves or leverage third parties like we've been doing to date through our qualified custodians and through liquid staking. Over time, we will evolve our operating business, but we have nothing to share on today's call, Kevin, but great question.

Okay. Well, I think I did ask you after the June quarter call. So I appreciate that. In light of sort of compressing premiums to NAV, I'm wondering, Mr. Chalom, how you're viewing issuing preferreds versus converts. And I understand your financial service prowess and experience, and I value your opinion.

Sure. Kevin, I think the beautiful thing about doing this through a structure, a public company structure and a digital asset treasury structure is we have many tools available to us to raise capital. And to date, it's primarily been through issuance of common equities. You mentioned 2 others, convertibles and other equity-linked securities or prefs. There are certainly tools in the toolbox that can enable us to capture value from both ETH volatility as well as investors who may be seeking exposure to that volatility. And in both those instances, we would be able to issue those capital structures without diluting shareholders even when we're trading below NAV.

We do view those, Kevin, as complementary tools to our at-the-market and stock buyback strategies. And as I said before, the fact that our reserve asset Ether is volatile is actually a plus. And there are many ways, as you've described, to monetize that volatility while enhancing liquidity and ETH exposure. We're not going to comment on today's call about share buybacks or our future capital raise, but there are -- those are 2 very good tools in our toolbox, and we're constantly looking at these opportunities to see how we can both raise capital and allow ourselves to capitalize on the volatility of our asset. And both converts and prefs are tools we're considering.

Ladies and gentlemen, that concludes our time allowed for questions. I'll turn the floor back to Mr. Chalom for any final comments.

Thank you all. In conclusion, I really want to thank everyone for joining us today and for your continued support and confidence in SharpLink's long-term vision. We are really proud of the progress we've made in this third quarter, our first full quarter of being an Ethereum treasury strategy, and we're very excited about what's ahead.

I need to thank our team who's worked relentlessly over this period in building and accumulating and staking our ETH and doing it, as you would expect in a risk-managed way from an institutional steward of billions of dollars of ETH on our balance sheet, and we look forward to speaking with you again on our next earnings call.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.