Sharplink Gaming Q2 2025 Earnings Report

Sharplink Gaming EPS Results

• Actual EPS: -$0.64
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Sharplink Gaming Revenue Results

• Actual Revenue: $0.70 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Sharplink Gaming Announcement Details

• Quarter: Q2 2025
• Date: 8/14/2025
• Time: After Market Closes
• Conference Call Date: Friday, August 15, 2025
• Conference Call Time: 8:30AM ET

Sharplink Gaming (NASDAQ:SBET), Inc. operates as an online technology company that connects sports fans, leagues, and sports websites to sports betting and iGaming content. The company operates through four segments: Affiliate Marketing Services United States, Affiliate Marketing Services International, Sports Gaming Client Services, and SportsHub Games Network. It operates a performance marketing platform, which owns and operates state-specific web domains to attract, acquire, and drive local sports betting and casino traffic directly to the company's sportsbook and casino partners, which are licensed to operate in each respective state; and offers sports betting data to sports media publishers. It also provides iGaming and affiliate marketing network, which focuses on delivering quality traffic and player acquisitions, and retention and conversions to global iGaming operator partners worldwide; and development, hosting, operations, maintenance, and service of free-to-play games and contests. In addition, the company owns and operates various real-money fantasy sports and sports simulation games and mobile apps on its platform; and is licensed or authorized to operate in every state in the United States, where fantasy sports play is legal and in which SportsHub has elected to operate based on the financial viability. SharpLink Gaming, Inc. was founded in 2019 and is headquartered in Minneapolis, Minnesota.

Sharplink Gaming Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: SharpLink has raised over $2.6 billion since June 2 and acquired more than 700,000 ETH, establishing itself as one of the largest public Ethereum treasury companies.
• Positive Sentiment: The company’s institutional-grade partnerships with Consensus, Galaxy, Parifi, Coinbase, and Anchorage Digital underpin its robust staking operations and risk-managed ETH yield strategy.
• Positive Sentiment: SharpLink uses an “ETH concentration” metric—ETH held per 1,000 diluted shares—to transparently track capital efficiency and align long-term shareholder value creation.
• Negative Sentiment: In Q2, it recorded a $87.8 million non-cash impairment on its liquid-staking tokens, contributing to a $103.4 million net loss under current U.S. GAAP.
• Neutral Sentiment: SharpLink’s legacy affiliate marketing business in iGaming (eis.net) remains operational, with plans to explore blockchain-focused gaming partnerships for future revenue diversification.

Presentation

[Operator]

Good morning, everyone, and thank you for participating in today's conference call to discuss SharpLink's Q2 twenty twenty five Financial and Operating Results.

[Operator]

By now, everyone should have access to the second quarter twenty twenty five earnings press release, which was issued yesterday afternoon at approximately 04:05 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.

[Operator]

Following management's remarks, we'll open up the call for Q and A. I will now turn the call over to SharpLink's Vice President of Corporate Communications, Doty Handy, for introductory comments.

[Dodi Handy, VP - Corporate Communications at SharpLink Gaming]

Well, thank you, operator. Please see SharpLink's filings with the SEC and the earnings press release this morning, which lists 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 made by us during this call. 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 ease concentration that are not GAAP metrics.

[Dodi Handy, VP - Corporate Communications at SharpLink Gaming]

Please see our earnings press release and SEC filings for further information regarding these metrics. To set the agenda for today's call, we're going to begin with SharpLink's Chairman, Co Founder of Ethereum and Founder and CEO of Consensus, Joseph Lubin, who will outline the company's mission, vision for Ethereum's role in the future global finance and the macro trends driving Sharpening strategy. Next, Co Chief Executive Officer, Joseph Shalom, will discuss Sharpening's ETH treasury strategy in detail, including how the company will scale its ETH holdings, activate ETH to generate yield and leverage capital markets to accelerate growth and drive stockholder value. Mr. Shaulam will be followed by our Co Founder and Co Chief Executive Officer, Rob Pithian, who will provide an update on SharpLink's affiliate marketing business.

[Dodi Handy, VP - Corporate Communications at SharpLink Gaming]

And then finally, Chief Financial Officer, Robert DeLucia, will review the second quarter twenty twenty five financial results and key performance metrics related to SharpLink's East Treasury. I would now like to turn the call over to SharpLink's Chairman of the Board, Joseph Leuven. Here you go, Joe.

[Joseph Lubin, Chairman at SharpLink Gaming]

Thank you, Dodie, and good morning, everyone. Today marks the start of a new chapter for SharpLink, our first earnings call as a company fully aligned around a single powerful mission to become the world's largest and most trusted Ethereum treasury company. This earnings call represents the very first opportunity for SharpLink's leadership to talk with our fellow shareholders since launching this exciting new journey together just a few months ago. I'd like to share a brief introduction on myself and provide a look back at Ethereum's origin story. In 2014, I was part of an extraordinary group of people who cofounded Ethereum.

[Joseph Lubin, Chairman at SharpLink Gaming]

Bitcoin was around five years old and starting to show signs of antifragility and staying power. And Ethereum's big idea was to create a single blockchain that could power all kinds of different assets at the same time. If you could have all kinds of different assets on the same blockchain, then maybe they could interact. You could write programs, we call them smart contracts, to control that interaction and put those on the blockchain too. The vision was that the Bitcoin was the world's first digital asset.

[Joseph Lubin, Chairman at SharpLink Gaming]

Ethereum would be the world's first digital economy, and that evolution has played out pretty much as we envisioned. Before Ethereum launched, I founded Consensus AG and later Consensus Software Incorporated to be a commercial counterpart to the nonprofit Ethereum Foundation. Consensus introduced products like MetaMask, which is now the most popular crypto wallet in the world and Infura, which is the most popular way for developers to access Ethereum and other blockchains. Consensus has been a major builder and operator of the Ethereum protocol since the early days. We catalyzed global adoption of Ethereum, incubated and invested in hundreds of Ethereum native startups and helped pioneer new technologies like staking, smart contracts and zero knowledge proofs that are scaling Ethereum today.

[Joseph Lubin, Chairman at SharpLink Gaming]

On July 30, just two weeks ago, I marked the tenth anniversary of Ethereum's launch by ringing the NASDAQ closing bell with my friend, Venkraad Piste, the protocol architecture co lead from the Ethereum Foundation as part of a global celebration of the network and ecosystem that took place around the world. Nasdaq shared with us that this was the largest activation of the year for them and I'm not surprised. This is another data point indicating that traditional finance is onboarding to decentralized finance. Today, Ethereum secures hundreds of billions of dollars in digital assets, processes trillions of dollars of transactions each year and is home to products from Wall Street titans like BlackRock, Fidelity, Apollo, Franklin Templeton, JPMorgan and many others. We'll begin in 2015 as a bold vision for decentralized computation has grown into the foundation of a multi trillion dollar opportunity spanning DeFi, stablecoins, tokenized assets and more.

[Joseph Lubin, Chairman at SharpLink Gaming]

From bootstrapping a small developer community to powering trillions in economic activity, Ethereum's growth has been exponential for a decade and we're still just getting started. For those who are unfamiliar, Ethereum is the technology platform that sits underneath most of the stablecoins and other digital assets in the world and gives them the ability to do what they do. So the fact that they settle in real time, the fact that they're borderless, the fact that they're programmable, all the things that make digital assets great, that comes from Ethereum. It's a decentralized technology like the Internet that acts like a public utility and does that so well that it's become what CNBC calls Wall Street's invisible backbone. The beating heart of all this activity is a revolutionary decentralized trust system called proof of stake that allows Ethereum to secure and validate all these different transactions.

[Joseph Lubin, Chairman at SharpLink Gaming]

And at the heart of Proof of Stake is Ether or ETH, the native digital asset of Ethereum. ETH is an extraordinary asset. It's an excellent store value. It has been deflationary at multiple points in time. When staked, it earns a productive real yield of approximately 3% and it's also a growth asset.

[Joseph Lubin, Chairman at SharpLink Gaming]

Historically, ETH market cap has grown by about $1 for every $2 of high quality liquid assets secured on Ethereum layer one and layer 2s. The ETH macro opportunity is real and we believe it's still very early in its life cycle. For perspective, stablecoins today have a total market cap of around $240,000,000,000 with the U. Treasury Secretary Scott Bessen recently stating that $2,000,000,000,000 is a very, very reasonable market cap for dollar backed stablecoins by 2028, and he could see it greatly exceeding that. Tokenized securities are around $25,000,000,000 today, but are projected by Boston Consulting Group and others to reach up to $16,000,000,000,000 by 02/1930.

[Joseph Lubin, Chairman at SharpLink Gaming]

We believe Sharplink's ETH treasury strategy positions us at the center of this multi trillion dollar shift, giving our stockholders exposure to one of the most disruptive trends in capital markets history. This is a structural opportunity on the same scale as the Bretton Woods accord and Nixon's closing of the gold window in 1971, which laid the foundation for decades of falling U. S. Treasury rates and rising bond prices. We're on the same scale as that of Japan's boom and bust in the 80s and 90s, which set up three decades of low interest rate yen borrowing for carry trades.

[Joseph Lubin, Chairman at SharpLink Gaming]

At this moment, we're positioned to benefit from a multi decade progression towards a digitized and decentralized economy, a shift that has accelerated since the inception of Bitcoin and is now gaining meaningful institutional adoption and legislative support. This will put a persistent bid under digital assets like ETH and Bitcoin that are leading the drive to decentralization. This macro shift from intermediated platforms to digital decentralized systems is powering what we believe will be one of the most significant capital market transformations in history. Legislators in The US are writing new rules for Web three, the re decentralization of the worldwide web. And Paul Atkins and Hester Peirce just initiated the SEC's Project Crypto to accelerate market structure in this direction.

[Joseph Lubin, Chairman at SharpLink Gaming]

As investors recognize this dynamic and the paradigm shift that is underway, we're seeing a major surge in institutional interest and adoption. ETH is rapidly emerging as the core institutional, functional and productive digital asset and Ethereum as the emerging rails for institutions, asset issuers, builders and even AI agents with demand accelerating seemingly every day. To further discuss how Sharpening is uniquely positioned to capitalize on this generational market opportunity, I'd like to turn the call over to our newly appointed Co Chief Executive Officer, Joseph Shalom. Joseph?

[Joseph Chalom, Co-CEO at SharpLink Gaming]

Thank you, Joe, and good morning, everyone. I joined Sharplink because I see a powerful opportunity to continue shaping the next generation of financial infrastructure. The world is changing and Sharpening through its Ethereum treasury strategy and ecosystem activities is positioned to lead that change. As Joe mentioned earlier, our mission is to become the world's largest and most trusted Ethereum treasury company. This is a company built on institutional grade principles for one purpose, to unlock Ethereum's full potential and put it to work for investors.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

I'm thrilled to be part of it. Sharplink's commitment to aligning its strategic direction with the Ethereum ecosystem reflects a bold and forward looking vision, one that deeply resonates with my passion for digital assets and scaling innovative financial technologies. Prior to joining Sharpen, I spent nearly two decades at BlackRock where I served in senior leadership roles, helping scale BlackRock's Aladdin portfolio and risk management system, one of the largest platforms for the entire buy side community and architecting BlackRock's digital asset efforts. Over the last five years of my tenure at BlackRock, I focused on setting the strategy and executing BlackRock's digital asset efforts. I hope to bring institutional grade crypto strategies to traditional finance and institutional investors.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

This included several landmark product innovations, notably the launch last January 2024 of the iShares Bitcoin Trust iBit, the world's largest spot Bitcoin ETF with approximately $85,000,000,000 in assets. The launch last July 2024 of the iShares Ethereum Trust Ether which is now the world's largest spot ETF and manages approximately $14,000,000,000 in assets. And finally, the launch of Biddle, the world's largest tokenized US treasury fund built on Ethereum. My overarching mission through these efforts was to bridge the world of traditional finance with a crypto ecosystem and its vibrant community. These efforts were built through deep collaboration with industry partners like NASDAQ, Coinbase, Securitize, Anchorage Digital and others who are building a robust ecosystem to support these innovative digital asset products.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

At Sharplink, my goal is to provide investors with the smartest way to benefit from the long term Ethereum opportunity. We're in the early stages of a strategy designed to give stockholders institutional grade risk managed exposure to ETH and its yield. Our efforts are backed by best in class transparency and reporting, and we're going to be doing it in a way that strengthens the Ethereum network and creates enduring value for our stockholders. We are motivated by the long term ETH opportunity and not by a short term ETH trade. Let me now turn into a deeper dive on our Ethereum treasury strategy, our core pillar of Sharplink's long term value creation plan.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

We're taking a strategic forward leaning approach. We're not just accumulating and holding these on our balance sheet. We're activating it. Much like how Michael Saylor and Strategy unlocked access to Bitcoin through a treasury strategy, our goal is for Sharpening to unlock public market access to ETH and the Ethereum ecosystem. But we're going a step further.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

Beyond just capital appreciation, we're transforming ETH into a yield generating treasury asset through native staking, restaking and participation in DeFi. Simply put, our investment thesis is to raise capital in an efficient manner. We're currently doing this by selectively issuing common equity. We're also exploring the use of equity linked securities to capture their inherent value in ETH's volatility and evaluating additional capital raising structures such as preferred securities. All of this is to further our ultimate goal of increasing our ETH concentration, our North Star metric.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

This metric measures how much ETH we hold per 1,000 diluted shares and serves as the clearest indicator of both the scale and capital efficiency of our ETH accumulation strategy. By focusing on ETH concentration, we give investors a transparent objective way to track how we're building long term shareholder value. So to recap, we believe Sharpenlink offers the smartest way for investors to gain exposure to ETH and the Ethereum opportunity. First, we capture ETH and its full yield potential well beyond what's available through passive ETF exposure. Second, even compared to staked ETH, our active capital market strategy and intelligent treasury management increases ETH concentration over time, putting more ETH behind each share, delivering even more value to our stockholders.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

And importantly, Sharpen benefits from its unique strategic relationship with consensus as well as trusted relationships with asset managers Galaxy and Parifi and with our industry leading custodians Coinbase and Anchorage Digital. These relationships help us achieve institutional grade treasury operations and efficiency. Our approach creates a powerful value proposition for our stockholders delivered through a highly liquid, fully transparent NASDAQ listed company led by a team of world class experts. Since launching our treasury strategy on June 2, we have raised more than $2,600,000,000 in investor capital and purchased more than 700,000 units of ETH. And we've done it in a way that has significantly improved our ETH concentration metric demonstrating our ability to maximize value for our stockholders.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

We've raised this capital through a series of strategic transactions that have positioned Sharpening as one of the largest public ETH treasury companies. On 05/30/2025, we closed a $425,000,000 private placement led by consensus and supported by other prominent crypto venture capital firms and providers that included Parify Capital, Electric Capital, Pantera Capital and Galaxy Digital to name a few. In addition, we have a total of $6,000,000,000 in ATM capacity in place providing significant flexibility to continue raising capital to build our East holdings. And in the last week or so, we've raised $600,000,000 in capital to register direct offerings with global institutional investors, some of which are among the largest in the world. Our capital markets approach remains opportunistic with a focus on both accretion and cost of capital with the aim of increasing our ETH concentration metric.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

We are frequently asked whether we have set a specific target for the amount of ETH we intend to acquire. Our plan is to continuously and aggressively accumulate ETH over the long term for the benefit of our stockholders. Before I hand over to my partner Rob Sithian, I want to take a moment to thank our team for their herculean efforts in helping launch our new Ethereum treasury strategy. I also want to recognize our strategic partners at consensus for their incredible collaboration and depth of expertise that they're bringing to this effort. Both of these are differentiated advantages for Sharpen.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

I will now turn the call over to Rob to provide an update on Sharpen's affiliate marketing operating business. Rob?

[Rob Phythian, Co-Founder, Co-CEO & Board Member at SharpLink Gaming]

Thank you, Joseph, and thank you everyone for joining today's call. For those who are new to our company, SharpLink's legacy affiliate marketing business is focused on performance based customer acquisition, connecting leading sports books and online casino operators with high value players. Through our flagship affiliate network, eis.net, we enable our partners to drive qualified traffic, conversion and long term player retention across both U. S. Regulated and global iGaming markets.

[Rob Phythian, Co-Founder, Co-CEO & Board Member at SharpLink Gaming]

In addition to pas.net, we operate a portfolio of state specific direct to player websites. These platforms are designed to engage local sports bettors and casino players in a highly targeted compliant manner driving traffic to operating partners licensed in each respective state. This dual approach gives us both scale and precision making us a valuable acquisition channel for the iGaming industry. Looking ahead, we see meaningful opportunities to evolve this business. As the gaming ecosystem continues to integrate blockchain technologies and digital assets, SharpLink is positioning itself at the forefront of this shift.

[Rob Phythian, Co-Founder, Co-CEO & Board Member at SharpLink Gaming]

We're actively exploring partnerships with crypto focused gaming platforms enabling us to offer new innovative marketing solutions tailored to a digitally native tech savvy audience. With that, I'll turn the call over to our Chief Financial Officer, Bob DeLucia to take you through our financial results. Bob?

[Robert DeLucia, CFO at SharpLink Gaming]

Thank you, Rob. First, please refer to our press release this morning for the Q2 financial highlights and an update on our current ETH treasury strategy metrics. We will now go through the financial results for the quarter ended 06/30/2025. As we review our second quarter financial results, I'd like to remind everyone that all comparisons and variance commentary referred to the prior year quarter unless otherwise specified. Please note that these results reflect less than one month of activity from our newly implemented Eats treasury strategy, which launched on 06/02/2025.

[Robert DeLucia, CFO at SharpLink Gaming]

As of June 30, the last day of the second quarter, the company held 24,704 East with a net value of $61,500,000 In addition, we held 164,731 LSEth or liquid stake Eth with a net value of $382,400,000 after factoring in an impairment resulting from our current accounting rules. I'd like to talk about LSEs for a moment because if you aren't familiar with how liquid staking works, there are some counterintuitive accounting factors that investors and stockholders need to be aware of. Under the rules, LSE is classified as a digital intangible asset because the LSE token provides an enforceable right to redeem an underlying amount of ETH deposited in a smart contract. Digital intangible assets must be recorded at their historical costs less any impairment on the condensed consolidated balance sheet. The company performs a test of digital intangible assets for impairment annually or more frequently if events or changes in circumstances indicate that the asset is impaired.

[Robert DeLucia, CFO at SharpLink Gaming]

The test for impairment consists of a comparison of the fair value of the digital intangible assets with their carrying amounts. Impairment losses are not reversible under U. S. GAAP. Increases in the value of LSCs are not recognized until the redemption or sale of LSCs occurs.

[Robert DeLucia, CFO at SharpLink Gaming]

Following the receipt of LSE in 2025, the price of LSE decreased and it was determined that the carrying amount of the LSEth exceeded its fair value during the quarter ended 06/30/2025. In determining if an impairment has occurred, the company is required to use the lowest price of one LSE's quoted on an active exchange at any time during the quarter, which in Q2 was approximately $2,300 As a result, the company recognized an impairment loss of $87,800,000 on its LSE holdings, reducing the carrying value of the LSEs. So there's no confusion for our investors. I want to state plainly that this impairment loss is a non cash loss and is a result of the company following the current accounting practices. Assets like LSE are relatively new and we recognize the tremendous effort that is going into updating U.

[Robert DeLucia, CFO at SharpLink Gaming]

S. GAAP to accommodate digital assets. Over time, we expect further progress to ensure that investors have a clear and consistent information about a company's financial performance across a variety of digital assets. Revenue in the second quarter was $700,000 compared to $1,000,000 in 2024. Gross profit in the 2025 was $200,000 or 30% of revenue compared with $300,000 or 28.5% of revenue for Q2 of last year.

[Robert DeLucia, CFO at SharpLink Gaming]

SG and A expenses in the second quarter were $2,300,000 compared to $1,500,000 in 2024. Net loss in the second quarter was $103,400,000 compared to $500,000 in Q2 of last year. The current quarter loss was primarily driven by the $87,800,000 non cash accounting impairment and the recognition of a $16,400,000 of non cash stock based compensation expense in conjunction with the strategic advisory agreement with consensus. As of 06/30/2025, cash on hand was $5,100,000 compared to cash on hand of $1,400,000 as of 12/31/2024. For additional details, I want to emphasize that today's remarks are only a summary of certain highlights.

[Robert DeLucia, CFO at SharpLink Gaming]

Our complete official financial statements in the 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 06/30/2025 filed with the Securities and Exchange Commission. This concludes our prepared remarks. We will now open it up for questions from those participating in the call. Operator, back to you.

[Operator]

Thank you. The floor is now open for questions. Our first question today is coming from Devin Ryan of Citizens. Please go ahead.

[Devin Ryan, Director of Financial Technology Research at Citizen JMP]

Hey, thanks. Good morning, everyone. Congrats on the launch and progress on strategy to date. Appreciate you taking the questions. I guess, first of all, I want to dig in a little bit on the points that you made around the opportunity to activate ETH to drive incremental yield beyond staking.

[Devin Ryan, Director of Financial Technology Research at Citizen JMP]

It would seem your team has some kind of unique background to do that. So just love to hear a little bit more about some of the areas you're focused on near term to do that and then how you see it evolving long term and just what type of yield pickup you think you can generate from that? Thank you.

[Joseph Lubin, Chairman at SharpLink Gaming]

Thank you for the question. This is Joseph Lubin or Joe Lubin for the purposes of this call. I'll be the Air Traffic Controller for these questions, and I may answer some, but we'll route them appropriately. Joseph Shalom, can you handle that please?

[Joseph Chalom, Co-CEO at SharpLink Gaming]

Sure. Devin, welcome to the call and thanks for the question. I think when you take a step back, we want to do a few things. We want to accumulate ETH for the long term and we want to activate it through yield strategies. To date, we've really focused on native staking and the liquid staking protocol that Bob mentioned.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

I think as we continue to grow we would like to take advantage of all the staking opportunities whether that is native, liquid, restaking, or to participate in DeFi yields. That said, I think it's very important to emphasize that our expectation is we're going to do this in an incredibly risk managed way. Building a portfolio of East staking should be along some risk return continuum. And we're going to use our institutional grade experience plus the experience and depth of expertise at consensus to continually optimize that, but we're doing it in a way that's going to be safe and accretive for our shareholders. And if we do that well, which we will, there'll be a compounding effect as part of our treasury strategy.

[Devin Ryan, Director of Financial Technology Research at Citizen JMP]

Excellent. Thank you. And just for my follow-up. In the investor presentation, you have a lot of good detail on there. But you kind of frame a valuation opportunity for ETH of 15,000 to $40,000 by 2028, which would obviously be really nice appreciation from here.

[Devin Ryan, Director of Financial Technology Research at Citizen JMP]

And I think you probably underlined some of the strategy to buy ETH as much as you can. So I'd love to just hear about some of the broad strokes around how you're thinking about the valuation for ETH, the type of adoption on Ethereum you think we need to see to get to those types of levels? Anything else you would kind of frame in that question as well?

[Joseph Lubin, Chairman at SharpLink Gaming]

Yes. So it's not easy to peg an actual number by a certain period of time for the price of Ether. Ether is at its mainstream moment or Ethereum is at its mainstream moment currently in the sense that it's scalable, affordable, usable enough. It's no longer dangerous to be an Ethereum company in The United States Of America, and it is now open for business to be a company that either uses tokens or issues tokens or makes use of DeFi. So it's on, and that's just going to be a game changer.

[Joseph Lubin, Chairman at SharpLink Gaming]

The Ethereum ecosystem needs more applications, and there are many developers coming into the space that previously were not comfortable coming into the space because of the previous administration's attack on our technology. So the builders are coming, the companies are coming, the applications are coming, the users are coming, there's legislative support. There's support from major financial institutions that have all made it clear that Ethereum is the technology that they're going to build on. It's primarily because it's the largest, most mature ecosystem in the space. And it's also because financial institutions appreciate technologies that haven't gone down once in the last ten years.

[Joseph Lubin, Chairman at SharpLink Gaming]

And Ethereum is in a class of its own. So whether it's 8,000, 10,000, 15,000 by the end of this year or much higher by the end of subsequent years, it's all about Ethereum becoming a new kind of software. We're calling it Trustware that will enable the world to onboard itself in terms of financial applications and really become Web3, the decentralized worldwide web. And so we do anticipate that as we grow scalability that the world's applications will sit on decentralized rails and much of that will be on Ethereum.

[Devin Ryan, Director of Financial Technology Research at Citizen JMP]

That's great. I appreciate the perspective and congrats again guys. Thanks.

[Operator]

Thank you. Our next question is coming from Joseph Vasey of Canaccord Genuity. Please go ahead.

[Joseph Vafi, MD - Equity Research at Canaccord Genuity - Global Capital Markets]

Hello everyone. Congratulations on the progress so far and thanks for having me on the call here today. I thought maybe we'd start a little bit, rapidly achieved a prominent position in the broader ETH ecosystem with the treasury strategy. Just wondering away from the ETH treasury strategy, are there other things you're working on right now to broaden the value use and I guess the mainstreaming of the ETH ecosystem over and above buying and staking? And then I have a quick follow-up.

[Joseph Lubin, Chairman at SharpLink Gaming]

So I personally am involved with a company called Consensus that has for around ten years been working to build, grow, expand the Ethereum ecosystem. And there are lots of synergies that we're exploring between Consensus and SharpLink. And so we may have a concrete answer to your question at some point soon, but let me throw it over to Joseph in case he has any thoughts on that front.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

Sure. So lots of Josephs on this call and answer, but thanks for the question. I think right now we on behalf of our stockholders are really, really focused on doing an excellent job executing on our Eats treasury strategy. We do have an existing affiliate marketing businesses business and we believe there are going to be opportunities to find new operating businesses that drive revenue that are both synergistic and complementary with what we do today, but will also leverage, the close relationship, the strategic partnership with consensus. That is a differentiated advantage for Sharplink.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

No other ETH treasury has that strategic relationship with a company with the most experience and depth of knowledge in Ethereum. So I would ask you to be patient. We are exploring additional opportunities to drive revenue growth and that revenue growth itself and the earnings could be reinvested in ETH, so we can create a bit of a flywheel and a righteous cycle. But that's something we're exploring. We're early in the strategy and we're focused on doing it right.

[Joseph Lubin, Chairman at SharpLink Gaming]

Yes. And my role let me just follow-up a little bit. My role is Chairman of the Board at SharpLink, and I don't have day to day executive responsibilities. That said, I'm paying very careful attention to what's going on day to day at SharpLink because it's doing important things and it's moving really fast. Consensus has contributed top tier talent to SharpLink and seconded some talents to SharpLink.

[Joseph Lubin, Chairman at SharpLink Gaming]

So the team on the ground at SharpLink has an intimate understanding of what consensus does and what's going on in the Ethereum ecosystem. And we're constantly sharing information about what we're seeing with our all the personnel at Sharplink. So any sort of event or innovation that's going on in the Ethereum space, is immediately ingested at Sharplink. And so while Sharplink needs to focus on the core strategy for now, that they have the full benefit of the vistas of consensus to lean on.

[Joseph Vafi, MD - Equity Research at Canaccord Genuity - Global Capital Markets]

That's great color. Thanks, Joe. And then maybe just really quickly on the treasury strategy itself, clearly off to a very strong start with solid momentum in comparing and contrasting, for example, to strategy formerly known as MicroStrategy, you do have yield generation capability. How do you think that that yield generation could perhaps, form a maybe a slightly different way or approach to treasury accumulation relative to the different financial instruments available to you and your balance sheet? Thanks very much.

[Joseph Lubin, Chairman at SharpLink Gaming]

Mr. Shalom, all yours.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

Sure. I think first we have to give credit where credit is due. And Michael Saylor and his team have done an amazing job, with strategy and their Bitcoin, treasury. And what's interesting is they've demonstrated over the past four years that they can create a premium to the NAV in their stock price and they can sustain it. And that is really important.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

And they've done that largely because they have an ability to drive both earnings and to use financial products to raise capital that are accretive. I think at SPET and in an East Treasury strategy you have that. You have an ability to have capital appreciation in an efficient public company highly liquid wrapper. I think what you also have is the ability to create yield and compounded on a continual basis. So that is really, really important.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

I also think owning ETH through SSAT or a public company, you have an ability not just to focus on the accumulation and compounding of these, but you also have the benefit that the revenue that's thrown off from the yield has a forward valuation and there will be opportunities to grow that revenue. And I think that is why you're going to see this be a successful strategy. But we owe a tip of the hat to Michael Saylor. This just has additional benefit of compounding yield.

[Joseph Vafi, MD - Equity Research at Canaccord Genuity - Global Capital Markets]

Thanks very much.

[Operator]

Thank you. Our next question is coming from Brian Kinstlinger of Alliance Global Partners. Please go ahead.

[Brian Kinstlinger, MD, Director - Research & Head - Technology Research at Alliance Global Partners]

Great. Thanks so much for taking my questions. There are several smart blockchains. Ethereum by far has the largest share in terms of total value locked and total assets secured. Can you talk about some of the key developments that will ensure Ethereum can sustain its lead or even increase that share that investors should be tracking?

[Joseph Lubin, Chairman at SharpLink Gaming]

Sure. Hey, Brian, happy to address that. Ethereum ecosystem did go through a period of doldrums for a while. Well, there was lower activity and lower mood in the broad blockchain ecosystem and that certainly affected Ethereum more than others partially as a result of the attacks of the SEC that were mostly directed towards Ethereum because it is the most decentralized protocol and because The United States Of America and major financial institutions felt that the decentralization and disintermediation that Ethereum enabled was a bit of a threat to the way that they like to do business. But fortunately, we're beyond that and headwinds have turned into gale force tailwinds at our back.

[Joseph Lubin, Chairman at SharpLink Gaming]

The sentiment inside the Ethereum ecosystem is very high right now. Even during the the more malaise period, the builders were just building. We've been heads down building for ten years building enabling infrastructure to scale the technology and get it ready for its mainstream moment. And so as I said before, we're already scalable enough, both horizontally and vertically, to handle rapid growth. What we're focusing on now is creating greater composability across the Layer two networks and Layer one.

[Joseph Lubin, Chairman at SharpLink Gaming]

So there are various technologies being built and actually in use that will enable synchronous composability across different Layer two networks. And so that means that within two seconds or less, you can, get transactions done even across different networks. And there's a huge effort to beef up the performance of Layer one. So that's the transaction throughput per second and reducing the latency. So that involves growing the amount of gas per block, reducing block times and variety of other techniques, including parallelization of smart contract execution.

[Joseph Lubin, Chairman at SharpLink Gaming]

And so the ambitions of the Ethereum ecosystem, the core developers are to make Layer one extremely more performant while still retaining appropriate decentralization. After all, it is decentralization, that distinguishes Ethereum from essentially all other protocols, perhaps Bitcoin and Ethereum are in the same class in that respect.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

Joe, I would just add to Brian's question. One of the reasons why we think we are at a moment that matters in a paradigm shift is this Ethereum macro opportunity. You have tailwinds of the Genius and Clarity Acts, you have the Circle IPO, but more importantly, you are seeing very significant growth in institutional adoption. And if you take a step back, the expansion of the assets and transactions on Ethereum and the L2s is because Ethereum is a global platform not just for stablecoins and tokenized real world assets, but also decentralized finance. That drives network value of Ethereum.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

Our partners at Consensus published a really interesting Trustware report that laid out a fundamental way of thinking about Ethereum and its network valuation. And the simplest headline is that, ETH market capitalization could grow by $1 for every $2 of assets secured on Ethereum. And right now if you look at the competition, Ethereum is securing nearly 60% of all stablecoin transactions, 83% of tokenized real world assets and 72% of high quality liquid DeFi transactions and that's 10x the second largest platform. So we think there's not only momentum, but there's mindshare and institutional adoption and that drives Ethereum network value and ETH's market capitalization.

[Joseph Lubin, Chairman at SharpLink Gaming]

Thanks, Joseph. And Brian, let me put a timeline to my remarks. On May 7, our core developers landed the most complex hard work in the history of Ethereum, or at least the biggest one. And that was obviously landed flawlessly as we do, and that had some scalability improvements. The next hard fork for Fusaka is scheduled to land in the October, November time frame.

[Joseph Lubin, Chairman at SharpLink Gaming]

And that will enable greater scalability of the Layer two technologies and has a few other enhancements. Soon after that, we have Glamsterdam. Glamsterdam is going to be focused on scaling layer one. And so we expect Glamsterdam to land sometime in Q2 of next year. So and even alongside those improvements, there are things that we can do alongside that, namely increasing gas limits and soon parallelizing the release schedule between essentially improvement of the Ethereum layer one technology versus the Ethereum layer two technology, which depends on a different kind of storage called blobs.

[Joseph Lubin, Chairman at SharpLink Gaming]

So all of this is happening essentially now and pretty rapidly.

[Brian Kinstlinger, MD, Director - Research & Head - Technology Research at Alliance Global Partners]

Great. My follow-up would be, thus far your capital has been raised through equity, but you alluded to evaluating other structures. Can you talk about your approach to debt? Are there maximum debt to equity ratios that you look to maintain or any other metrics? How we should think about them?

[Dodi Handy, VP - Corporate Communications at SharpLink Gaming]

Joseph?

[Joseph Chalom, Co-CEO at SharpLink Gaming]

Sure. To date, we've been really focused on raising common equity. We've done it through a pipe. We've done it through registered direct offerings. And as we alluded to on our call, we have $6,000,000,000 of ATM facilities that are available that are really available to us.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

Our focus at this point is also and we've said this publicly to explore the use of equity linked securities in order to capture the inherent value in Eats volatility and we're also evaluating additional capital raising structures such as preferred securities. So we are early in our capital raise. We've raised $2,600,000,000 in under eleven weeks. That has resulted in our East Treasury owning $3,300,000,000 of East. But as we move forward, we're going to make sure we're using every opportunity to raise capital in the most efficient way.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

To date, it's been common equity, but equity linked is coming in our future at the appropriate time and we're going to do it in a disciplined way.

[Brian Kinstlinger, MD, Director - Research & Head - Technology Research at Alliance Global Partners]

Great. Thanks so much. Congratulations on the strategy and the success.

[Operator]

Ladies and gentlemen, we're showing time for one final questioner. Our final question is coming from Bill Papanastasio of KBW. Please go ahead.

[Bill Papanastasiou, Vice President at Keefe, Bruyette & Woods (KBW)]

Good morning, Thanks for taking my questions. A bit of a side note, this is a full circle moment for me about a decade ago. I recall watching Joe Lubin speak in Toronto during the L4 Venture days. Just two questions for me. First, we could start off with maybe you can share your vision of how treasury strategies will evolve over time as competition seems competition across smart contract block chains seems to become more competitive? Thank you.

[Joseph Lubin, Chairman at SharpLink Gaming]

Sure. So I'll start with a longer range overview and then hand it over to Joseph for a more immediate view. So this is a paradigm shift. We are past the inflection point and we're fully in the paradigm shift towards a progressive decentralizing of the global economy. That's not just my opinion.

[Joseph Lubin, Chairman at SharpLink Gaming]

That seems to be the opinion of legislators and regulators in The United States and other places. It seems to be the opinion of major financial institutions. I may be living further in the future than most people, but seems to see people catching up pretty rapidly. And the paradigm shift will involve all of us becoming on chain. So in the same sense that interactive companies or web studios in the 1990s and the arts started working with traditional organizations to build websites to get their information online, to build e commerce sites, to bring them on to mobile and social over the last years and essentially transformed the global economy by bringing companies and people online.

[Joseph Lubin, Chairman at SharpLink Gaming]

We are doing that in our ecosystem by making it both legal and comfortable and easy for people and organizations to use tokens to participate in the token economy. So as tip of the spear, companies like SharpLink are bringing traditional finance to DeFi by, a, recognizing that there's a deep structural shift going on and a structural trade in place. As I mentioned in my remarks on this call, this is very similar to thirty years of treasury rates going down and bond prices going up. It's very similar to thirty years of the Japanese carry trade. So something structural is going on and we believe that we and others are going to be well advised to continue to accumulate what we think of as the highest powered money on the planet right now, which is ether and bitcoin.

[Joseph Lubin, Chairman at SharpLink Gaming]

And they're highest powered because they're uncensorable and because they don't admit the exploitation and financial repression of citizens of different nation states. And so we will continue to do this. We will differentiate ourselves because we are deep, in the technology and we can bring all the expertise of consensus and base their ecosystem to bear on what Sharplink does. Joseph, my colleague, will do the same for the traditional, finance industry. And, we are going to eventually, make use of an extremely large pool of the highest power of money, to do things that, will be societally impactful.

[Joseph Lubin, Chairman at SharpLink Gaming]

That is a later stage of this particular strategy. And let me throw it over to Joseph.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

Sure. I would say from a competitive and evolution perspective, I want to start by just acknowledging that competition is excellent in this space. What do I mean by that? It means that there are multiple market leaders and some of the largest institutional investors in the world who believe in the thesis of an Ethereum long term opportunity. That said, there is room for multiple treasuries.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

We believe like in many network scale businesses, a few will take the most assets because scale and liquidity really matters. We're proud to be among the top 50 last week in liquid public stocks, which is a really positive thing for our investors. I also would say we are taking a long term view. And as much as we focus on, what's happening in the industry, we're actually singularly focused on being the most trusted and the most transparent in this space, trusted in that we will follow the best risk managed approach to raising capital, acquiring yields and then deploying it for yield. And we will also do it in a way that's most transparent, with weekly updates and other means for people to track our core metrics.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

And that I think in the long run will be differentiating. And institutional capital is looking for, not only long term investment opportunities, but to do it with the most transparent and trusted in the industry. And that's where we're going to keep our focus for our stockholders.

[Bill Papanastasiou, Vice President at Keefe, Bruyette & Woods (KBW)]

Thank you. That was a very informative response from both of you. Joe Lubin, you spoke about the world moving on chain. Are there any major infrastructure gaps that need to be solved in order to see this happen? Do you see any potential overhangs today from seeing TradFi move over to DeFi essentially? Thank you.

[Joseph Lubin, Chairman at SharpLink Gaming]

As I said in my earlier remarks, we are at our mainstream moment right now, in terms of scalability, affordability, usability, legality. And what we what we anticipate is that more and more demand will come. And like any technology, we're going to have to respond to what that demand does to our ecosystem, to our technology. So we've had many moments in the last ten years where new uses have come along, and they've shown us how we need to improve the technology. So so we'll need a lot of that going forward, in terms of maintaining scalability of the technology as more and more use cases and companies and people are onboarded.

[Joseph Lubin, Chairman at SharpLink Gaming]

Usability is a very important one. So we've done a pretty good job making wallets and applications more usable, more intuitive. But the consensus and many other projects in our ecosystem are experimenting with artificial intelligence to make the technology delightful and intelligible. People don't read terms and conditions on the web currently, and it's going to be unreasonable to expect that people will understand the intricacies of decentralized finance or the intricacies of decentralized governance in a DAO, for instance. And so people will soon have access to what I like to think of as a digital twin AI agent that understands them well, that represents their interests on the web and on chain.

[Joseph Lubin, Chairman at SharpLink Gaming]

And so we will be building that sort of technology that you own and you control that protects your own personal information and enables you to understand what's going on in a protocol upgrade or some sort of proposal in a decentralized organization or how to position yourself in decentralized finance or in a game or something like that. So the the user interface that you can talk to, that you can express your intent and have a a network of solvers underneath that, go ahead and fulfill your request within two seconds. That's the kind of advancement that we're going to need over the next two plus years in order to make the technology really easy to use.

[Operator]

Thank you. We actually have time for one more question. Our last question is coming from Kevin Dede of H. C. Wainwright. Please go ahead.

[Kevin Dede, MD & Senior Technology Analyst at H.C. Wainwright & Co.]

Thanks very much for fitting me in. I appreciate that. Maybe a little sort of back office housekeeping question, gentlemen. I don't understand whether or not you're running your own validator nodes or intend to continue outsourcing and what you might do to extract higher levels of MEV?

[Joseph Lubin, Chairman at SharpLink Gaming]

Joseph, do you want to talk about the back office and Sure.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

The I think risk controls are really, really important, Kevin. And that's why when the strategy was kicked off, we partnered with leading asset managers like Parify and Galaxy as well as with Anchorage and Coinbase to build that structure around us to make sure we were doing the institutional grade best in class accumulation and staking. To date, we've used delegated staking through those custodians. And as I mentioned earlier, through native staking and one liquid staking protocol.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

As I mentioned, we are going to continually evaluate that to look at what the most efficient way to drive yield is across a full gamut of opportunities, again staking, restaking, DeFi yield opportunities. But we're going to do it in a risk managed way, because at the end of the day this is a treasury strategy to accumulate and compound, but we're going to do it in a way that's best for our stockholders and not take unnecessary risk. That said, our differentiated relationship with consensus gives us incredible depth of knowledge and access to this community to make sure we are staking in the highest risk reward way. And I think that's a differentiator relative to our competitors.

[Kevin Dede, MD & Senior Technology Analyst at H.C. Wainwright & Co.]

As much as you feel free to offer, I'd appreciate understanding the buy triggers. I mean within the context of these being worth 15 to $40,000 how do you approach your day to day buying on the market?

[Joseph Chalom, Co-CEO at SharpLink Gaming]

I think I'll take a high level answer to that, which is, as you just described, if there's a long term ETH opportunity and ETH today is trading in the mid-4000s and you believe there's going to be significant adoption on the Ethereum network, therefore driving the value of ETH up and that is the thesis, then you want to buy and accumulate as much ETH as possible early in this mega cycle and that's simply what we're doing. And we're trying to execute again through best in class providers. But I think we're very focused on accumulating because that is where we are early in this adoption cycle.

[Kevin Dede, MD & Senior Technology Analyst at H.C. Wainwright & Co.]

Fair enough, gentlemen. Thank you for including me. I appreciate it.

[Operator]

Thank you. At this time, I'd like to turn the floor back over to Mr. Shalom for closing comments.

[Joseph Chalom, Co-CEO at SharpLink Gaming]

Well, thank you everyone for joining our first earnings conference call as an East Treasury company. We truly appreciate your continued support and confidence in our vision. And I want to be clear, we remain focused on executing our strategy, driving growth and delivering value for our stockholders. And we look forward to speaking with you again on our next earnings call. So have a great weekend everyone.

[Operator]

Ladies and gentlemen, this concludes today's event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.

Participants

Analysts

• Dodi Handy, VP - Corporate Communications at SharpLink Gaming
• Joseph Lubin, Chairman at SharpLink Gaming
• Joseph Chalom, Co-CEO at SharpLink Gaming
• Rob Phythian, Co-Founder, Co-CEO & Board Member at SharpLink Gaming
• Robert DeLucia, CFO at SharpLink Gaming
• Devin Ryan, Director of Financial Technology Research at Citizen JMP
• Joseph Vafi, MD - Equity Research at Canaccord Genuity - Global Capital Markets
• Brian Kinstlinger, MD, Director - Research & Head - Technology Research at Alliance Global Partners
• Bill Papanastasiou, Vice President at Keefe, Bruyette & Woods (KBW)
• Kevin Dede, MD & Senior Technology Analyst at H.C. Wainwright & Co.