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▲ Ethereum (ETH)
A large-scale on-chain investment fund aimed at attracting institutional capital into the Ethereum (Ethereum, ETH) ecosystem has been established. Sharplink, a digital asset financial firm led by a financial expert from BlackRock, has partnered with Galaxy Digital to bet on the expansion of Ethereum-based decentralized finance and the tokenization market.
On May 20 (local time), Joseph Chalom, CEO of Sharplink, who appeared on the cryptocurrency podcast The Paul Barron Podcast, stated that Ethereum will become a key infrastructure for future capital markets. Chalom previously led BlackRock's digital assets team for six years, overseeing stablecoin, cryptocurrency, and tokenization businesses. He explained that Sharplink allows individual and institutional investors to access Ethereum investment opportunities in the form of listed shares. Sharplink holds approximately $2 billion in Ethereum assets, with over 70% of them utilized for staking.
Chalom cited a long-term capital structure as the differentiator between Sharplink and typical Ethereum spot ETFs. He explained that spot ETFs must respond to daily redemption demands, making it difficult to stake all held Ethereum; typically, only 60% to 80% can be staked. In contrast, Sharplink stated that it can maximize staking yields based on long-term capital with no short-term redemption pressure. Earlier this year, Sharplink deployed $200 million to EtherFi, leveraging a structure that provides additional Ethereum rewards in exchange for depositing capital for two years.
Sharplink also launched an on-chain yield fund totaling $125 million with Galaxy Digital. Sharplink contributed $100 million, and Galaxy Digital contributed $25 million to this fund, which operates by providing liquidity to on-chain protocols that meet institutional-grade due diligence standards. Chalom presented security and practical usability as key criteria for investment targets, stating, “Public companies should elevate, not lower, industry standards.” The idea is to support the ecosystem's initial liquidity by providing long-term capital to verified protocols rather than chasing short-term high returns.
Chalom diagnosed that as artificial intelligence, stablecoins, tokenized assets, and decentralized finance converge, the center of financial services is shifting on-chain. He envisioned a future where users possess smart wallets, and digital agents that understand individual investment tendencies and operational criteria could act as the Chief Financial Officer within the wallet. This would involve automatically managing idle funds or generating additional income using tokenized assets. Chalom explained that stablecoins are expanding beyond their initial use as crypto on/off-ramps to cross-border remittances, inter-company fund transfers, and global payment infrastructure.
The regulatory overhaul in the United States was also presented as a key variable for the Ethereum ecosystem. Chalom assessed that if the US cryptocurrency market structure bill passes, truly decentralized protocols and non-custodial decentralized finance projects could grow within a clear legal framework. He stated that stablecoins and tokenized assets could be the biggest beneficiaries, and large financial institutions might move beyond the experimental phase to actively inject capital into the tokenization market. However, he noted that the current market continues to be a risk-averse environment following rising oil prices, changing interest rate outlooks, and the approximately $20 billion deleveraging shock in October last year.
Ethereum's Glamsterdam upgrade was mentioned as a key technological variable that will enhance mainnet competitiveness. Chalom explained that Glamsterdam's main goals are to reduce fees and increase throughput for the Ethereum Layer 1 mainnet. While Ethereum has prioritized security and thus ceded roles to Layer 2 and competing chains in terms of throughput, analysis suggests that if the mainnet secures both security, liquidity, and throughput in the future, it could re-emerge as the foundation for stablecoin payments, tokenized asset transactions, decentralized finance, and micro-payments between AI agents.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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