Q3 2025 SharpLink Gaming Ltd Earnings Call

25.

By now everyone should have access to the third quarter 2025 earnings press release, which was issued yesterday afternoon at approximately 405 P M Eastern time.

Devin Ryan: Great. Good morning, Joseph, Joseph, Rob, and Bob. First question is probably for Joseph Lubin because I'd love to dig in a little bit just on kind of the Ethereum growth and particularly Linea, because it just seems like a ton of momentum there. I know that can kind of trickle down into more activity here. Huge wins like SWIFT. I'd love to just hear about what the attributes are that are driving that demand from partners. If you can, just talk a 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.

The release is available in the Investor Relations section of sharp links 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 sharp links Vice President of business and legal Affairs Dougherty Handy. Please go ahead.

Thank you operator.

Please see sharp linked quarterly report on Form 10-Q filed yesterday with the SEC and the earnings press release, which crossed the wire yesterday afternoon. These documents lists some of the factors that may cause the results of sharp link to differ materially from what we say today and which.

Some of the risks and uncertainties that could affect our business prospects and future results.

Joseph Lubin: 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 roadmap for scaling and executed it remarkably well. 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 one, even while we scale layer twos with enhanced blob binary large object access and scaling layer one as well. The Fusaka upgrade will do great things for both of those, and the Lambsterdam upgrade, hopefully somewhere around six months later, will in particular concentrate on layer one scalability.

<unk> 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 east 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 sharp links chairman co founder of a varian and founder and CEO of consensus Joseph Luwian, who will provide a broader perspective on our variance continued growth institutional adoption and the evolving regulatory landscape shaping the digital.

Speaker #1: By now, everyone should have access to the third quarter 2025 earnings press release, which was issued yesterday afternoon at approximately 4:05 PM Eastern Time.

Speaker #1: 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.

As that economy.

Speaker #1: 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.

Next co Chief Executive Officer, Joseph Sharon will discuss sharp links progress in execution of its east Treasury strategy, highlighting key achievements from the quarter and our areas of primary focus in the quarters ahead.

Speaker #2: Thank you, Operator. Please see SharpLink's quarterly report on Form 10Q filed yesterday with the SEC and the earnings press release, which crossed the wire yesterday afternoon.

Then Rob <unk> co Chief Executive Officer will share an update on sharp links affiliate marketing business. He will then be followed by Chief Financial Officer, Bob de Lucia will be recapping, the third quarter 2020 financial results and key performance metrics related to sharply each strategy.

Speaker #2: These documents list some of the factors that may cause the results materially from what we see today and which identify some of the risks and uncertainties that could affect our of SharpLink to differ business, prospects, and future results.

Joseph Lubin: We've also decoupled the ability to upgrade blobs and gas limits from the traditional upgrade cycle, so we're going to be able to accelerate both of those. Linea is particularly exciting because it is the only Layer 2 ZK EVM 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. I can't announce too much about what we're launching in the near term on Linea. The SWIFT project itself is going well. We are on track to build the prototype that has been articulated. Other systemically important financial institutions are also building on Ethereum technology. We've seen actual launches from DTCC.

I would now like to turn the call over to sharp links chairman of the board Joseph Lubin, Joe the floor is yours.

Speaker #3: SharpLink assumes no duty and does not undertake to update any forward-looking statements. Any forward-looking statements made by us during this call are based only on information currently available to us and speak only as of the date when it is made.

Thank you Tony good morning, everyone.

I'm, the chairman of sharply and as many of you know also a co founder of a theorem CEO and founder of consensus leading appear in software development company.

Consensus so sharply strategic adviser offering support across a broad range of topics from product collaboration market education protocol due diligence and more.

Speaker #3: In addition, we may be discussing or providing certain metrics today such as ease concentration, that are not gap metrics. Please see our earnings press release and SEC filings for further information regarding these metrics.

The strategic connectivity between consensus and sharpened sharply stockholders unique competitive advantages relative to other.

Speaker #3: 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, the institutional regulatory landscape shaping digital adoption, and the evolving asset economy.

Digital asset treasuries stockholders are starting to see early examples of this such as distinct and collaboration between consensus and sharply that we announced in October to provide enhanced levels of risk adjusted yield on a portion of these capital.

Youngest unique partnership.

Seeing incredible tailwind that I can only describe as a massive acceleration.

Speaker #3: 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.

Institutional adoption Super cycle Wall Street, and other institutions, including our own government in the U S.

Fully embracing it CRM opportunity for.

First over the past few months, we've seen major accelerants to this adoption.

Speaker #3: Then, Rob Vivian, 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 2025 financial results and key be recapping the third quarter performance metrics related to SharpLink's ETH strategy.

These include the FCC's project crypto announcements to support bringing capital markets on chain as a national competitive advantage.

Joseph Lubin: There are other ESDs around the world that are making use of Consensus Ethereum technology. Major stock exchanges have announced that they are tokenizing stocks on Ethereum technology and Consensus Ethereum technology, and major banks are also doing the same thing. Let me leave it at that.

The passage of the Genius act to create a regulatory framework for stable point of adoption.

JP Morgan announcement that they will allow institutional clients to use their ether holdings as collateral for loans.

Speaker #3: I would now like to turn the call over to Joseph Lubin. Joe, the floor is SharpLink's Chairman of the Board, yours.

Governance in Japan, and South Korea announcing the launch of their local currency denominated stable coins on material, where the bulk of the global stable client activity resides.

Speaker #4: you, Dodi. Good morning, everyone. I am the Chairman of SharpLink, and as Thank many of you know, also a Co-Founder of Ethereum and the CEO and Founder of Consensus, a leading Ethereum software development company.

Devin Ryan: Yeah. Yeah. No, I appreciate all that detail. Just one on SharpLink and kind of the broader strategy as we look into 2026, I appreciate there's a number of variables that probably go into this. 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? Is there a percentage, or how are you thinking about that? 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 the staking yield as they're an active owner of ETH?

Alibaba announcing the launch of their layer two network built on up there.

Speaker #4: Consensus is also SharpLink's strategic advisor, offering support across a broad range of topics from product collaboration, market diligence, and more. The strategic connectivity between Consensus and SharpLink gives SharpLink's stockholders unique ETH digital asset treasuries.

At the <unk> annual meeting five weeks ago, the Swiss CEO announced as a focus of his keynote that they are working with consensus to build the swift ledger using linear consensus is labor to experience technology. It was clear to everyone at Cypress. The traditional finance was now moving rapidly to onboard itself onto it.

And various aspects of decentralized finance.

Speaker #4: Stockholders are starting to see early examples of this, such as the staking collaboration between Consensus and SharpLink that we announced in October, to provide enhanced levels of of our ETH capital.

And in parallel to Swift adoption, the DTC and other central Securities Depository is around the world major stock exchanges and banks like Jpmorgan Deutsche Bank are just a few of the major financial institutions that are building on it there.

Speaker #4: Beyond this unique partnership, we're seeing incredible tailwinds that I can only describe as a massive acceleration of an institutional adoption supercycle. Wall Street and other institutions, including our own government in the US, are fully embracing the Ethereum opportunity.

Robert DeLucia: Devin, I'll take that. This is Joseph, and thanks for the question. I think there are two 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. 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, we do not provide guidance on the specific yield we expect to achieve from our staking and restake opportunities. 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.

I will restate our long term thesis a theorem is becoming mainstream global trusler, a new kind of software platform does eliminate some traditional risks and inefficiencies and guarantees execution as advertised.

Speaker #4: Just over the past few months, we've seen major accelerants to this include the SEC's Project Crypto announcement to support bringing capital markets competitive advantage.

And ether is the institutional grade trust commodity that is powering transactions agreements some systems on the next generation financial infrastructure.

Continues to extend its massive lead and the smart contract platform space.

Speaker #4: The adoption. passage of the Genius Act to These create a regulatory framework for stablecoin adoption, JP Morgan 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 activity resides, where the bulk of the global stablecoin Alibaba announcing the launch of their Layer 2 network built on Ethereum, and their Cybose annual meeting five weeks currency-denominated stablecoins on Ethereum, ago, the Swift CEO announced as a focus of his keynote that they are working with Consensus to build the Swift Ledger, using Linea, Consensus's Layer 2 Ethereum technology.

<unk> dominates the flows across stable coins, cocainize real world assets and high quality defined liquidity.

Institutional adoption Super cycle is underway and it is now finally supported by our regulators just us along and I. Both attended and presented this week at a very high quality Tenter crypto event organized by Cantor Fitzgerald.

Robert DeLucia: You would have seen our Linea and Consensus announcement just last month where we're deploying about $200 million of our ETH from our ETH treasury in a collaboration with EtherFi, EigenLayer, Linea, and Consensus. In that case, we're investing in a liquid restake token, and we're getting enhanced yield without taking enhanced risk because of economic incentives from some of our collaborators and partners. 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. We're going to participate in the ecosystem, and we're going to get that yield.

Together many of the leading U S regulators and legislators with top tier founders C suite executives and investors for a wide range of presentations and discussions.

Institutions are present in force and accelerating their activities and the theorem ecosystem.

Speaker #4: It was clear to everyone at Cybose that traditional finance was now moving rapidly to onboard itself onto Ethereum and various aspects of decentralized finance.

<unk> 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.

Speaker #4: And in parallel to Swift's adoption, the DTCC and other central securities depositories around the world, major stock exchanges and banks like JP Morgan and Deutsche Bank, are just a few of the major on Ethereum.

This resulted in a fair and becoming the home of most of the <unk> liquidity in the ecosystem.

Now to support institutional adoption in high transaction volume. In addition to the massive scaling provided by the theorem layer two networks, we're witnessing step function improvements in the theorems layer, one meaning that transaction throughput scalability and efficiency.

Speaker #4: I will financial institutions that are building 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.

Robert DeLucia: The one thing we've highlighted is that this unique yield opportunity in this collaboration is still being risk-managed, and the liquid restake token is sitting in Anchorage or qualified custodian. 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, 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.

Speaker #4: 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.

Further improvements are coming with the theorems for soccer 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 it <unk> mean that.

With sharply youre executing in anticipation of a future where it then becomes the settlement layer for trillions of dollars in Tokyo, Nice assets real world instruments and on chain liquidity, increasing <unk> per share for our investors.

Speaker #4: This institutional adoption supercycle is underway, and it is now finally supported by our regulators. Joseph Chalom and I both attended and presented this week at a very high-quality Cantor Crypto event organized by Cantor Fitzgerald.

As a cofounder of a theorem I've witnessed great cyclicality and volatility in the price of digital assets, including <unk>.

Devin Ryan: Yeah. Okay. Really appreciate that, Joseph. I will get back in the queue, let others ask, but great to see the progress over the past couple of months here.

Speaker #4: It brought together many of the leading U.S. regulators and legislators with top-tier founders, C-suite executives, and investors for a wide range of presentations and discussions.

Should not distract us from the secular paradigm shift that is now going mainstream sharply just perfectly positioned to build value for shareholders at the confluence of technological scaling and maturity regulatory clarity and institutional adoption of materials.

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

Speaker #4: 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.

I'd like now to turn the call over to our co Chief Executive Officer, Joseph alone to walk through how were positioned during this important moment in this term journey.

Sure our third quarter operational updates Joseph.

Thank you Joe and good morning, everyone.

Speaker #4: 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 throughput, scalability, and coming with Ethereum's Fusaka 1 mainnet transaction upgrade in December, which will efficiency.

To begin I'd like to share that we are really pleased with the results of this quarter.

First full reporting period since we launched our theory and Treasury strategy.

Operator: Thank you. Our next question comes from the line of Brian Kinslinger with Alliance Global Partners. Please proceed with your question.

We will talk through our Q3 financials in more detail later.

I want to highlight two very positive points.

Brian Kinslinger: Great. Thanks so much. 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?

First we delivered approximately $10 8 million in total revenue up over 10 X year over year as a result of our best in class Treasury management, and staking nearly 100% of our east.

Speaker #4: unlock even further, much more upgrades to support the growing demand from institutions to drive transactions, and value, on regular parallel scaling Ethereum's mainnet. With SharpLinker executing in anticipation of a future where Ethereum becomes the Further improvements are settlement layer for trillions of dollars in tokenized assets, real-world instruments, and on-chain liquidity, increasing ETH per share for our investors.

Second we delivered net income of approximately $104 3 million largely.

Robert DeLucia: 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. We are right now in the midst of doing a survey of the entire ecosystem for these yield opportunities. The Consensus Linea announcement was the first in what I would expect would be more innovative announcements. What's interesting, being a large corporate holder of ETH, is that we view our ETH as permanent capital.

Largely driven by gains in our theory importance.

These results demonstrate the strong momentum, we're seeing across our business, particularly as institutions continue to build on and engage with a theory and ecosystem, let me add a new era of regulatory clarity.

Speaker #4: As a Co-Founder of Ethereum, I've witnessed great cyclicality and volatility in the price of digital assets, including ETH. I should not distract us from the secular paradigm shift that is now going mainstream.

What was once viewed as a major barrier to institutional participation has now been lifted with a digital asset industry, gaining clear recognition and support from the U S government.

Speaker #4: 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.

It is not a coincidence that we are seeing a major inflection point for institutional adoption of digital assets and decentralized finance.

Wall Street and government globally are recognizing the power of stable coins to facilitate nearly instant movement of value at no cost.

Speaker #4: And share our third-quarter operational updates.

Robert DeLucia: 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 multi-year staking relationship. Others have a very difficult time doing that, whether you're a retail investor or an ETF manager, because of the daily liquidity that you may need. When we approach the ecosystem and are willing to provide multi-year commitments, we are seeing that they are very eager to provide enhanced incentives for that locked TVL, or total value locked. We're still surveying. You will see, I believe, additional announcements later this quarter and in Q2. 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.

The largest banks and asset managers are deploying on chain and announcing roadmaps for the total integration of real world assets. This unlocks a new frontier of distributions and capital efficiency for investors.

Speaker #2: Thank

Speaker #2: you, Joe. And good morning, everyone. To begin, I'd like to share Joseph? that we are really pleased with the results of this quarter. Our first full reporting period since we launched our Ethereum treasury our Q3 financials in more detail later, but I want to highlight points.

And we're also seeing institutions, including sharply access high quality defy for borrowing lending and other financial parameters.

Speaker #2: First, we delivered approximately $10.8 million in total revenue up over 10x year-over-year. As a result of our strategy. best-in-class treasury management and staking, nearly 100% of our We'll talk through ETH.

Given the history security trough in liquidity on this area and it not only has the license to win it is winning the predominance of this institutional activity.

For this reason we are building a sharply 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.

Speaker #2: Second, we two very positive 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.

Giving us greater institutional experience and expertise.

Matthew Sheffield joined as our Chief investment Officer from Falcon X.

Robert DeLucia: That's how we're approaching it, like a great steward of institutional capital for our investors.

He served as the head of U S spot trading and previously worked at Bridgewater Associates.

Speaker #2: What was once viewed as a major barrier to institutional participation has now been lifted, with the digital asset industry gaining clear recognition and government.

Brian Kinslinger: Great. Maybe for Joe Lubin, we hear a lot about agentic AI and autonomous digital commerce. How do you feel Ethereum's position 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.

Maggie 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.

Speaker #2: 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, stablecoins to facilitate nearly instant movement of value at no cost.

And previously built brands for companies like Github and Facebook.

And Michael Commander joined as our Chief Development Officer from consensus where he led corporate development <unk>.

Joseph Lubin: Yeah. We at Consensus 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. Consensus itself has been doing some of the same. Marco DeRossi of Consensus has been working with the Ethereum Foundation and with Google to pioneer ERC 804, which is essentially a registry for agentic AIs to register their capabilities to be accessible by other agents or other software humans. 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.

He previously worked at Jpmorgan across investment banking and strategic investments.

Speaker #2: The largest banks and asset globally, are recognizing the power of managers are deploying on-chain, and announcing roadmaps for the tokenization of real-world assets. This unlocks a new frontier of distribution and capital efficiency for investors.

Leveraging our expertise and strategic partnership with consensus our team is laser focused on identifying the best E deployment opportunities and ecosystem partnerships to maximize value creation.

Speaker #2: And we're also seeing institutions, including SharpLink, access high-quality DeFi for borrowing, lending, and other financial primitives. 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.

Since we initiated our theory and Treasury strategy in June we have nearly 100% of our east.

This is in contrast, with many of our peers.

The Etfs.

We're earning real unseen yield through native staking and liquids taking protocols.

Recently, working alongside incentive we announced we will deploy $200 million of east onto its linear layer two platform in partnership with IBM cloud either Fi and acreage digital bank.

Speaker #2: 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.

Speaker #2: Giving us greater institutional experience and expertise. Matthew Sheffield joined as our Chief Investment Officer from FalconX, where he served as the Head of US Spot Trading, and previously worked at Bridgewater Associates.

Our scale and permanent capital base allows us to structure multi year deals that generate yield an economic incentives that materially exceed the standard theory speaking right.

Importantly, we're accessing defy level yields while carefully managing our risks, including ensuring that this deployment and custody. We've maintained within acreage one of our qualified custodians yield.

Speaker #2: 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 brands for companies like GitHub funds, and previously built and Facebook.

Joseph Lubin: 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 micropayments that make sense to make use of because Ethereum is very inexpensive right now and getting more inexpensive to do transactions, and the layer twos are very inexpensive. It's starting to make sense to be able to pay subsecond fees for accessing data and other kinds of services on the internet.

Yield opportunities like this are generally not available to individual investors or passive etfs and highlight the enhanced value that are actively managed treasury can generate for our investors.

Speaker #2: And Michael Camarda, joined as our Chief Development Officer from ConsenSys, where he led corporate development. He previously worked at JP Morgan across investment banking and strategic investments.

As part of our mandate, we've been proactively sharing our long term vision for <unk> role in global finance to both retail and institutional audiences.

Speaker #2: Leveraging our partnership with ConsenSys, expertise and strategic our team is laser-focused on identifying the best ETH deployment opportunities and ecosystem partnerships to maximize value creation.

A central element of our theory adoption thesis is that most financial assets, including fund stocks and bonds will be <unk>.

Speaker #2: 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.

This means that ownership of these assets will be represented in a digital token format on the blockchain we're.

We're not alone in this view just last month, Larry Fink, the CEO of Blackrock shared his vision that all assets will be token eyes on chain to drive both efficiency and accessibility for investors.

Speaker #2: 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 linear Layer 2 platform, in partnership with EigenCloud, EtherFi, and Anchorage Digital Bank.

That sharply we're not a passive observer of this paradigm shift.

Joseph Lubin: 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 world like web.

We're hoping ushered 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 a theory.

Speaker #2: Our scale and permanent capital base allows us to structure multi-year deals that generate yield and economic incentives that materially exceed the standard Ethereum staking rate.

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.

Speaker #2: 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.

We're actively working in the ecosystem to ensure there are market participants, which can support this innovative new financial standard and primitive.

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

Speaker #2: Yield opportunities like this are generally not available to individual investors or passive ETFs. We want to highlight the enhanced value that our actively managed treasury can generate for our investors.

It is important to acknowledge that like others in our space sharply share price has experienced periods of volatility.

As expected given our exposure to a reserve asset east which is volatile.

Speaker #2: As part of our mandate, we've been proactively sharing our long-term vision for Ethereum's role in global finance to audiences. A central element of our Ethereum adoption both retail and institutional assets, including funds, stocks, and bonds, will be tokenized.

What's important is that we have grown our total <unk> holding significantly over the past quarter and doubled our <unk> per share concentration from two point to.

4.0, since the inception of our Treasury strategy in June.

As we have shared in the past sharply is relentlessly focused on shareholder value and <unk> per share accretion.

Brian Kinslinger: Thank you.

Speaker #2: This means that ownership of these assets will be represented in a digital blockchain. We're not alone in this token format on the 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.

Operator: Thank you. Our next question comes from the line of Fedor Shabalin with B. Riley Securities. Please proceed with your question.

We have built the team that is well positioned to navigate the 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.

Joseph Chalom: Thank you, Operator, and good morning, everyone. Good to see solid staking rewards contribution in FreeQ revenues. My question is about the current multiple to net asset value. The stock is trading at a discount right now. Could you provide any details on what initiatives you consider besides just share buybacks? Any color on your priorities here would be helpful. Thank you.

Our digital outfit treasury structure gives us flexibility to make strategic decisions for the benefit of our investors.

Speaker #2: At SharpLink, we're not a passive observer of this paradigm shift. We're helping usher it in. In September, we announced a digital transfer agency, to become partnership with Superstate, a the first public company to natively issue its stock on Ethereum.

Speaking on capital markets, specifically what.

What our multiple to NAV is above one we have the ability to issue new shares and purchase is this is immediately accretive to <unk> per share.

When our multiple to NAV is below one we can raise capital to fund share buybacks. We can do this by monetizing our volatility and convertible bonds or other equity linked structures and we can utilize a portion of the $3 billion of <unk> on our balance sheet.

Speaker #2: The intent of this innovative partnership is to increase both utility of our public equity for accessibility and on-chain the new digitally native investor base.

Robert DeLucia: Sure. I think we are going through a period, which we hope is temporary, where many digital asset treasuries are seeing some compressed multiple to NAVs. I do think it provides us with an opportunity to do two 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 NAVs is trading at a discount. Our goal continues to be ETH per share growth. When our market multiple to NAV is above one, we can issue equity to purchase more shares. When it's below one, we can buy back stock. You would have seen that in August, our board approved a stock buyback program. Both of these actions are accretive. In this space, volatility can become an opportunity to capture value and not always a constraint.

Speaker #2: We're actively working are market participants which can in the ecosystem to ensure there support this innovative new financial standard and primitive. It's important to acknowledge that, like others in our space, SharpLink's share price has experienced periods of volatility.

<unk> to borrow capital.

In either of these scenarios, we're able to execute transactions that are accretive to stockholders and increase our <unk> per share concentration.

Speaker #2: 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.

I wanted 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 towards end market price and a premium to the net asset value of our <unk> holdings.

Speaker #2: 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.

This novel transaction paired and equity sale with a short dated premium purchase agreement.

<unk> us to issue stock to a high quality institutional investor interested in gaining upside exposure via this unique structure.

Speaker #2: We have the expertise and agility to take advantage of the right capital market sheet as our opportunities with a strong balance foundation. Our digital asset treasury structure gives us flexibility to make strategic decisions for the benefit of our investors.

Robert DeLucia: 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. 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. When our multiple to NAV is below one, we have to be careful in terms of how we can raise equity.

This deal reflects the strong institutional confidence and sharply strategy and long term vision.

By raising capital at a premium we continue to expand our east Treasury and increased <unk> per share for our stockholders.

Speaker #2: Speaking on capital markets specifically, when our multiple-to-NAV is above one, we have the ability to issue new shares and purchase ETH. This is immediately accretive to ETH per share.

Beyond innovative Treasury management, we do not have an exclusive multi year 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.

Speaker #2: When our multiple-to-NAV is below one, 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.

This allows us to raise capital acquired east and maximize its productivity through in house active management, allowing more of this value to flow to our stockholders.

Together these factors place sharply into distinctly advantageous position to capitalize on the institutional adoption Super cycle now unfolding across the theory and ecosystem.

Speaker #2: 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 closing our third quarter earnings results, Mark a proof point that sharply the theory Treasury model is indeed working.

Robert DeLucia: You would have seen the unique fundraising opportunity we took advantage of in October. 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.

Speaker #2: 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.

Our mission is to give investors the smartest and most efficient way to benefit from the long term opportunity.

We have built what we believe is the most innovative the theory and Treasury company, providing stockholders with institutional grade risk managed exposure to east and at yield.

Speaker #2: 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.

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

With that I will now turn the call over to my partner, Rob City and to provide an update on sharp links affiliate marketing business.

Speaker #2: 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 increase ETH per share for our stockholders.

<unk>.

Thanks, Joseph and good morning, everyone.

With the shifting of sharply focus and management resources towards the execution of our treasury strategy.

A reduced emphasis on expanding our affiliate marketing business Nonetheless.

Speaker #2: Beyond innovative treasury management, we do not have an exclusive multi-year 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.

Nonetheless, this segment continues to operate steadily.

Providing a modest source of revenue through our performance marketing and player acquisition services.

Joseph Lubin: Sure. Let me start with the second piece. Data availability sampling is one of the major upgrades. That's going to enable nodes on the network to need to hold less data. It'll enable the amount of blobs, or binary large objects, to grow significantly. There's also an upgrade that enables them to start to grow as a result of essentially something like monthly activity. That's called parameter-based upgrading. Both blobs, as well as gas limits, will be upgradable on a very regular basis. That's going to enable greater scalability at both layer one and layer two. Ethereum, the whole ecosystem, is growing pretty dramatically in its scalability. We already see networks on Ethereum that significantly rival or beat Solana's transaction throughput.

For the three months reporting period, ending September 32025, and 2024 revenue declined to approximately $570000 from $882000 respectively.

Speaker #2: 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.

Speaker #2: Together, these factors place SharpLink in a distinctly advantageous position to capitalize on the institutional adoption supercycle 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 2025 consolidated net loss from continuing operations improved with losses declined to approximately $800 compared.

Consolidated net loss from continuing operations of $781000 for the same three 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.

Speaker #2: 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.

To provide you with greater insight and perspective on sharp <unk> third quarter financial results.

I'll now turn the floor over to Bob de La <unk>.

Bob.

Thank you Rob.

Speaker #2: With that, I will now turn the call over to my partner, Rob Fithian, to provide an update on SharpLink's affiliate marketing business. Rob? Thanks, Joseph, and good morning, everyone.

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 32025, which we filed yesterday afternoon with the SEC.

Speaker #2: With the shifting of SharpLink's focus and management resources, towards execution of our ETH treasury strategy, we've reduced emphasis on expanding our affiliate marketing business.

Thank you provide the detailed disclosures and footnotes to complement today's discussion offering shifts stockholders and investors a comprehensive view of sharply financial position liquidity.

Joseph Lubin: A project that's coming online rapidly, MegaETH, operates at speeds that I believe are significantly in excess in terms of transaction per second throughput of Solana. The Solana numbers actually include in their transaction per second throughput essentially their voting mechanism, which are not actual transactions initiated by users. We'll see pretty soon the total transaction throughput of the Ethereum ecosystem eclipse what Solana is doing. We have composability enhancements, which will enable transactions and operations across different layer twos and across layer one to be very smooth and to have very low latency in between them. We'll start to see applications being built that access multiple layer two networks and layer one in roughly the same operation.

Speaker #2: Nonetheless, this segment continues to operate steadily, providing a modest source of revenue through our performance marketing and player acquisition services. For the three-month reporting period ending September 30, 2025, and 2024, revenue declined to approximately $570,000 from $882,000 respectively.

And if treasury performance metrics.

We will now go through the financial results for the quarter ended September 32025.

As we review our third quarter income statement results I'd like to remind everyone that all comparisons and variance commentary referred to the prior year quarter unless otherwise specified.

Speaker #2: 2025 consolidated net loss Our 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 three-month in 2024.

As of September 30, the company held 580 841 eight.

With a net fair value of $2 4 billion.

In addition, we held 236009, <unk> LLC or liquid stake deed.

Speaker #2: 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.

With a net cost value of $622 7 million.

Subsequent to the end of the quarter, our combined E Holdings has continued to decline standing at 637752 eight.

Speaker #2: Bob?

Robert DeLucia: 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 10 times 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. If you look at the high-quality liquid asset activity happening in the decentralized finance space, the majority is happening on Ethereum. 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.

Speaker #3: Thank you,

Speaker #3: Rob. I'll begin by encouraging everyone listening today and those who have read our earnings release to review our quarterly report on Form 10Q for the period ended September 30, 2025.

And 223499 LLC.

A total of 861251 as of Sunday November nine 2025.

Speaker #3: Which we filed yesterday afternoon with the SEC. The 10Q provides detailed disclosures and footnotes that complement today's discussion. Offering stockholders and investors a comprehensive view of SharpLink's financial position, liquidity, and ETH treasury performance metrics.

Revenue in the third quarter increased to $10 8 million compared to $9 million in Q3 of 2024.

The increase.

Was due to the success of our <unk> 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 <unk> holdings.

Speaker #3: 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.

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.

Speaker #3: 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 LSE or liquid staked ETH with a net cost value of $622.7 million.

SG&A expenses in the third quarter were $12 $4 million compared to approximately $709000 in Q3 of 2024.

Joseph Chalom: Thank you very much.

Joseph Lubin: Another important point to make is that many users do not need incremental transaction per second throughput. Lots of these networks are sufficiently capable of handling the volume. What a lot of the use cases do require is reliability. Nothing comes close to the 10 years of uptime, non-interrupted uptime that Ethereum provides.

Net income for the third quarter increased materially to 104.

$3 million compared to a net loss of <unk> 9 million in Q3 of last year.

The significant growth in net income.

Speaker #3: Subsequent to the end of the quarter, our combined ETH holdings have continued to decline, standing at $637,752 ETH and $223,499 LSE for a total of $861,251 as of Sunday, November 9, 2025.

It was primarily driven by $107 3 million.

Unrealized gain.

<unk> to fair value accounting adjustments on our <unk> holdings.

Joseph Chalom: Thank you very much, Joe, Joseph, and the team. Appreciate all the color, and continue your best of luck.

We also had a realized gain of $6 $3 million from the conversion of the east to LLC.

And a noncash impairment charge of approximately $7 million due to the lowest intraday market price for LSE during the third quarter.

Operator: Thank you. Our next question comes from the line of Kevin Dede with HC Wainwright. Please proceed with your question.

Speaker #3: Revenue in the third quarter increased to $10.8 million compared to $2.9 million in Q3 of 2024. The increase was due to the success of our ETH staking strategy during the third quarter.

Robert DeLucia: Thank you, Gurin Chance. Appreciate being on the call. Mr. Lubin, apologies for dragging you back over the upcoming upgrade. I'm curious, given your insight, how you see them progressing. I know the merge pushed to the right on numerous occasions. I'm wondering if in your negotiations with financial service institutions, whether or not that potentiality affects discussion of ETH versus Solana.

As of September 32025.

Cash on hand was $11 1 million compared to cash on hand of $1 4 million as of December 31, 2024.

Speaker #3: 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.

Additionally, at September 32025, we held $26 7 million and USD see stable coins 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 32025.

Speaker #3: 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.

Joseph Lubin: 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. We're targeting more than one major upgrade to the Ethereum protocol per year, hopefully landing on an average of two. 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 GlamsterDAN upgrade will probably land somewhere around six to eight months after Fusaka lands in December.

<unk> 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.

Speaker #3: 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 LSE and a non-cash impairment charge of approximately $7 for LSE during the lowest intraday market price third million due to the quarter.

Thank you if you'd like to ask a question. Please press star one on your telephone keypad.

Confirmation tone will indicate your line is in the question queue.

You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.

Our first question comes from the line of Devin Ryan with citizens Bank. Please proceed with your question.

Great Good morning, Joseph Joseph Robin Bob.

Speaker #3: 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, in September 30, 2025, we held $26.7 million in USDC stablecoins as a financial asset.

First question is probably for Joseph ILUVIEN, So I'd love to dig in a little bit just on Cabot Your theory AUM growth in particularly when knee 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.

Joseph Lubin: As I indicated before, we've decoupled a bunch of the upgrade trajectories from the main agenda or the main schedule so that we'll be able to upgrade the number of blobs or binary large objects on their own pace. We're going to be able to upgrade the gas limits on its own pace. We'll look to do a number of those decouplings and 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. We've got many, many teams on a number of different clients that are always working in parallel. An upgrade picks 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.

Huge wins like Swift and so I'd love to just hear about.

What are the attributes are that are driving.

That that demand from partners and then also if you can just talk a bit more about what the pipeline there looks like and any color around.

Speaker #3: For additional details, our complete official financial statements and accompanying footnotes including all required disclosures and management discussion and analysis are contained in our quarterly report on Form 10Q for the period ended September 30, 2025, filed with the SEC.

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.

Institutions are finally here.

Financial institutions and other enterprises recognize that.

Speaker #3: 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.

The digital assets are an incredibly important technology the decentralization.

Is a direction of travel.

Or not just the financial industry, but for the Internet and the web itself.

Speaker #2: Thank you. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Ah cerium.

<unk> has executed its.

Speaker #2: You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Roll up centric roadmap for scaling and executed remarkably well so we have a.

A lot of scalability capacity that has come online and much more coming yearly.

Joseph Lubin: Also, yeah, 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. We've written specifications to handle that and essentially solve that problem. Other than that, because of the roll-up-centric roadmap, much of the activity of financial institutions will be landing at layer twos. Layer twos have their own upgrade schedule and often their own technologies. 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 at layer two.

Speaker #2: Our first question comes from the line of Devin Ryan with Citizens Bank. Please proceed with your question.

Nearly every day.

We are focusing on.

Speaker #4: Great. Good morning, Joseph. Joseph Robin Bob. First question is probably for Joseph Lubin because I'd love to dig in a little bit just on kind of the Ethereum growth and particularly Linea because it just seems like a ton of momentum there and I know that can kind of trickle down into more activity here.

Sure.

Nicky.

Operations more interoperable across the different networks and down to the layer one even while these scale labor twos with.

The enhanced.

Bob binary large object access and scaling layer, one as well the two soccer upgrade.

Speaker #4: 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 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

We will do great things from both of those and.

The Amsterdam upgrade hopefully somewhere around six months later.

In particular concentrates on.

Layer one scalability.

We've also decoupled the ability to upgrade blobs.

And gas limits.

Speaker #4: in. So

From the traditional upgrade cycle and so we're going to be able to accelerate.

Speaker #5: So the general answer is that the institutions are finally here. 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.

Those.

Linear.

<unk> is particularly exciting.

Exciting because it is the only layer two technology <unk> technology that is 100% compatible with the theorem later ones.

Joseph Lubin: No delays would be caused by us paying attention to the needs of financial institutions, and just improvements would be driven by that.

Additionally, it is.

It's making use of ether.

Fees on on that network and on subsequent implementations of the linear technology.

Speaker #5: Ethereum has executed its roll-up-centric roadmap for scaling and executed it remarkably well. So we have a lot of scalability capacity that has come online, and much more is coming nearly every day.

Robert DeLucia: 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, Ethosila, the ETH machine, all accumulating massive amounts of the token. How would you recommend we look at the inflation characteristics of token issuance?

And it's burning both Peter and linear as we speak are contributing to the financial health of the mother ship later one.

We cant announce too much about.

Speaker #5: We are focusing on making operations more interoperable across the different networks and down to the layer one even while we scale layer twos with the enhanced blob binary large object access and scaling layer one as well.

What we're launching.

In the near term on linear.

And the Swift project itself is going well.

Are on track to build the prototype.

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

That has been articulated.

And other financial systemically important financial institutions are also building on the theme of them technology that we've seen.

Robert DeLucia: No, Joe, why don't you go on token inflation? I'll chat about competition or what I call co-opetition.

Speaker #5: The Fusaka upgrade will do great things for both of those, and the labs are then upgraded hopefully somewhere around six months later, will in particular concentrate on layer one 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 two technology, ZK EVM technology, that is 100% compatible with Ethereum layer one. Additionally, it is 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 one. 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 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 ConsenSys Ethereum technology, and major banks are also doing the same thing.

Joseph Lubin: Yeah. The Ethereum issuance schedule has expected inflation below 1% annually. I think it's a little bit below Bitcoin's and massively below Solana's, 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. You can expect that the max that could be issued in a year, if there's effectively no burning, I believe, is around 1.5%. 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. 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.

Actual launches from DTC.

There are other <unk> around the world that are making use of.

Of consensus is if.

<unk> technology.

Major stock exchanges has announced that they are.

<unk> stocks on.

On the <unk> technology and consensus up there in technology and major banks are also.

Doing the same thing.

So I'm going to be the better.

Yes, no I appreciate all that detail and then just one on one sharp Lincoln and kind of a 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 <unk>.

You over kind of the intermediate term should be stake versus could be applied to enhance yield or operating earnings and other ways for the business and so is there a percentage or how youre thinking about that and then.

We think about kind of intermediate term.

The incremental spread that you think your team can generate above and beyond.

What someone can get.

It is kind of just the stake in yield is there an active owner of beef.

So Kevin I'll take that this is Joseph thanks for the question I think there's two ways to answer it given east is a productive asset that you can state restage and gain yield as a treasury. Our first responsibility is to provide that yields. So I just wanted to say.

Joseph Lubin: We'll move to, excuse me, we'll move to being deflationary when the network gets very busy. It's not just the Ethereum network. Layer 1 BitBurns Ether. Layer 2, Linea Network is burning Ether. We look to see other projects taking up that mechanic and start burning Ether as well on different networks. My colleague informs me that I was pretty close, that Ethereum's median annual inflation rate is around 0.8%.

We have been staking nearly 100% of our yield of our EES.

Since the inception of our Treasury strategy.

As our responsibility as a steward of the.

Second is we don't provide guidance on specific yield we expect to achieve from our staking and rethinking opportunities.

What we will say is we.

We are focused on a risk adjusted yield.

Robert DeLucia: Yeah, I remember it was, yeah, it was deflationary after the merge for, geez, I want to say almost a year.

There may be people, who swings of defenses and seek very high <unk> level yields you would have seen our linear.

Speaker #5: So let me leave it

Speaker #5: There. Yeah, no, I appreciate all that.

Speaker #4: detail. And then just one sharp link 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 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?

Joseph Lubin: For a while, yes, exactly.

Robert DeLucia: Yeah. 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. That mind share, I think, had been lost for a period of time to Bitcoin and Solana. I think we regained that pole position. I would say we're trying to differentiate ourselves from our peers who we respect in a few ways.

And consensus announcement, just last month, where we're deploying about $200 million of our east.

From our east Treasury.

In our collaboration with Etherify eigen linear and consensus and in that case, we're investing in a liquid restaging token and were getting enhanced yield without taking enhanced risk because of economic incentives from some of our collaborators.

Speaker #4: 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 staking yield is there an active owner of

Speaker #4: 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 staking yield is there an active owner of ETH?

And partners.

I think what Youll hear from US is we're going to take an institutional approach to how we sake, we're going to state in the early 100% of our east and seek the best risk adjusted returns, which you can do given the scale of us being the second largest corporate holder of east So we're going to participate in that.

Speaker #3: So Devin, I'll take that. This is Joseph and thanks for the question. I think there's two 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.

The system, we're going to get that yield. The one thing we highlighted is that this unique yield opportunity in this collaboration.

Robert DeLucia: 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. When you can do it on team, more of the yield is yours to the benefit of our shareholders. 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. Second is our team, in conjunction with our advisors at Consensus, we are going to be differentiating ourselves on yield generation and finding the best opportunities. To do it in a really risk-managed way, we have a team of experts along with Consensus who know how to do that.

Speaker #3: staking nearly 100% of our So I just want to say we have been yield of our ETH since the inception of our treasury strategy as a responsibility and as a steward of that.

Is still being risk managed and liquid restating token is sitting in acreage are qualified custodian. So you could think of us trying to get the best risk adjusted yields, but we won't get it you won't give a target on the spread we will do the right thing and focus on risk management and get those desktop.

Speaker #3: 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.

<unk> for our investors that the average retail industrial cannot achieve and that an investor in an ETF cannot achieve either.

Speaker #3: There may be people who swing for the fences and seek very high default DeFi level yields. You would have seen our Linea and consensus announcement just last month where we're deploying about 200 million dollars of our ETH from our ETH treasury in a collaboration with EtherFi, Eigen, Linea, and Consensus and in that case we're investing token and we're getting in a liquid restaking enhanced yield without taking enhanced risk because of economic incentives from some of our collaborators and partners.

Yeah Okay.

Really appreciate that Joseph I will get back in the queue, let others ask but great to see the progress over the past couple of months here.

And let me also emphasize that.

As the relationship the close relationship between sharply and consensus that enabled.

Robert DeLucia: 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. We welcome the competition. It's a validation of the thesis. I hope the entire industry does well because that'll 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. Thank you, Joseph. 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. I appreciate the color. Thank you for that.

Us to configure.

<unk>.

Yield situation significantly above the stake in the regular staking yield without.

Increasing any risk.

One would normally do in the in the.

Speaker #3: think what you'll hear from us is we're going to So I 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.

But in our case.

That was.

Directly due to the linear relationship.

Thank you. Our next question comes from the line of Brian Canceling or with Alliance Global Partners. Please proceed with your question.

Speaker #3: 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 or qualified custodian.

Great. Thanks, so much.

A follow up to those questions.

Can you speak to the pipeline of other capital deployment opportunities.

Will there be competition with some of the larger eat holders as well or do you think some of these opportunities are exclusive to sharply.

Speaker #3: think of us trying to get the best risk-adjusted yield but we won't get it we won't give a target on the So you could 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

Robert DeLucia: 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 Consensus 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. 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.

I can take that one thanks, Brian.

We are looking and serving the entire ecosystem for opportunities staking re staking liquid staking.

Potentially borrowing and lending.

With our east in the <unk> ecosystem.

That said, we've hired a really expertise 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 the survey of the entire ecosystem for these yield opportunities.

Speaker #4: Yeah,

Speaker #4: okay, I really appreciate that, Joseph. either. I will stop get back in the queue, let others ask, but great to see the progress over the past couple of months here.

Speaker #2: And let me also emphasize that it is the relationship, the close relationship between SharpLink and Consensus that enabled us to configure a yield situation that was significantly the regular staking yield above the staking increasing any risk above one would normally do in the vanilla case.

Consensus linear announcement was the first in what I would expect would be more innovative announcements and whats interesting being a large corporate soldier of east is that we view, our <unk> 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 a stake our east with them, but to commit to a multiyear stating relationship.

Speaker #2: And that was directly due to the Linea relationship.

Speaker #1: Thank you. Our next question comes from the line of Brian Kintzlinger with Alliance Global Partners. Please proceed with your

And others have a very difficult time doing that whether you are a retail investor whether you're an ETF manager because of the daily liquidity that you may need so when we approached the ecosystem and are willing to provide multiyear commitments. We are seeing that they are very eager to provide enhanced.

Robert DeLucia: We have nothing to share on today's call, Kevin. Great question. Well, thank you for that. 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. Shalom, how you're viewing issuing preferred versus converts. 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. To date, it's primarily been through issuance of common equities. You mentioned two others, convertibles and other equity-linked securities or preps.

Speaker #1: question. Great, thanks so much.

Speaker #5: 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

Incentives for that locked TVO or total value locked. So we're still surveying you will see I believe additional announcements.

Speaker #5: SharpLink? I can take

Speaker #2: That one. Thanks, Brian. We are looking and surveying the entire ecosystem for opportunities—staking, restaking, liquid staking, and potentially borrowing and lending 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 opportunities but also on the inherent risks. We are right now in the midst of doing a survey of the entire ecosystem for these yield opportunities.

Later, this quarter and in quarter two but.

Reviewing it essentially is a portfolio of seeking 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 Lumen, we hear a lot about <unk>.

This digital commerce, how do you feel you are in this position for this trend compared to other change I know it sounded like the Osaka upgrade.

Speaker #2: The consensus 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 multi-year staking relationship.

Robert DeLucia: 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. 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. As I said before, the fact that our reserve asset Ether is volatile is actually a plus. 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. Those are two very good tools in our toolbox.

It definitely improves the positioning, but maybe I'd love to hear your thoughts.

Yes, so there consensus on across the.

Ecosystem are very excited for argentic future or our hybrid human machine intelligence future.

Clinton Foundation itself is.

<unk> has been doing some <unk>.

Outstanding work.

And figuring out the many ways that.

But we in the ecosystem can support.

Gentex.

Speaker #2: 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 multi-year 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 two but we're viewing it essentially as a portfolio of a staking and as an institutional investor and steward we are looking at the efficient frontier of it like a great steward opportunities and that's how we're approaching of institutional capital for our investors.

Census itself has been doing some of the same.

Marco <unk> consensus has been working with Easter and foundation.

With Google.

<unk> pioneered ERC below four.

Which is essentially a registry.

For.

Jim take AI is to register their capabilities.

The accessible by other agents or or.

Robert DeLucia: 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. Both converts and preps are tools we're considering. Awesome. Thank you very much, gentlemen. Appreciate the additional color, and congrats on the progress.

Other software.

Humans.

So it's a.

Useful for discovery.

And it's useful for reputation as other agents or Siemens Jim provide feedback on the registry regarding.

Their results so with respect to certain characteristics that have been published in the registry.

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

Linear is.

Speaker #5: Great. And then for maybe for Joe Lubin we hear a lot about agentic AI and autonomous digital commerce how do you feel if you're in this position for this trend compared to other chains?

It is going to be.

A very welcome homes.

Two agents.

Robert DeLucia: 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, 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. We look forward to speaking with you again on our next earnings call.

And another interesting element.

That I think has the potential to transform how we interact with the web quite significantly and how gyms like AI interacts with other agenda AI.

Speaker #5: I know it sounded like the Osaka upgrade definitely improves the positioning but maybe I'd love to hear your

Speaker #5: thoughts. Yeah, so

Speaker #2: we at Consensus and across the firm ecosystem are very excited for our agentic future or our hybrid human-machine intelligence future. The Ethereum Foundation itself is has been doing some some outstanding work in in figuring out the many ways that that we in the ecosystem can support agentic AI Consensus itself has been doing some of the same Marco DeRossi Consensus 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 to be accessible by other agents or other software humans so it's 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.

As X 402.

The internet.

And web.

<unk> was built with the native money maker payments.

And.

<unk> also made of identity, that's a different topic.

Essentially extra two is going to enable first wholly grill, the Holy Grail of micro payments.

That makes sense to make use of.

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

If there is very inexpensive right now and getting more inexpensive to do transactions in the later twos are very inexpensive and so it is starting to make sense there'll be able to pay sub second fees for accessing data and other kinds of services on the Internet. So you can imagine.

As the.

The web evolves.

Sure.

Apis can be wrapped in export to and agents where people ask.

Asked for data.

Receive a price paid that price and.

Speaker #2: So with respect to certain characteristics that have been published in the registry Linea is is going to be a very welcome home to agents and another interesting element that I think has the potential to to transform how we interact with the web quite significantly and and how agentic AI interacts with other agentic AI is x402 the internet and web was built without native money native payments and and also native identity that's a different topic essentially x402 is going to enable first a holy grail the holy grail of micropayments that that makes sense to make use of because Ethereum is very inexpensive right now getting more inexpensive to do transactions and the layer twos 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.

The access what they want from our website.

Having to sit through all the advertising that is currently saturating the worldwide web.

And Brian I would just add which I was describing is a massive future opportunity and use case on the cerium.

At work.

And that will drive more usage of ether as the native token securing it and Thats why we believe there is a long term macro opportunity to own as much either as possible and egencia.

<unk> AI use case is another tailwind for theory, and just like Cocainize assets.

Stable coins and institutional adoption.

Thank you.

Thank you. Our next question comes from the line of <unk> with B Riley Securities. Please proceed with your question.

Thank you operator, and good morning, everyone.

Okay.

Good to see so it's taken rewards contribution in <unk> revenues and my question is about the current multiple to that does it.

Speaker #2: 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 and and be able to access what they want from a website with that

The stock is trading at a discount right now and could you provide any details on.

What initiatives do you consider besides just share buybacks any color on your priorities here would be helpful. Thank you.

<unk>.

Sure I think we are going through a period, which we hope is temporary.

Many treasury digital assets treasuries are seeing some conquest multiple scenarios I do think it provides us with on that.

Speaker #1: World Wide Reading the Web .

Speaker #2: And, Brian, I would just add what Joe is describing is a massive future opportunity and use case on the Ethereum network.

Opportunity to do two things, which are really really important when you put shareholders first.

Speaker #2: 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 ether as much possible .

We are set up to basically be able to deal not only with new price volatility, but even when when our NAV is trading as a discount.

Speaker #2: And this agentic AI use case is another tailwind for Ethereum, just like tokenized assets, stablecoins, and institutional adoption.

Our goal continues to be per share growth and when our market multiple to NAV is above one we can issue equity to purchase more shares when its below one we can buy back stock and you would have seen that in August our board approved stock buyback program and both of these.

Speaker #3: Thank you .

Speaker #4: Thank you . Our next question comes from the line of fedora Shabalin with B Riley Securities . Please proceed with your question .

Options are accretive so in this space volatility can become an opportunity to capture value and not always our constraints I would also say that our decision framework again is rooted in <unk> per share accretion and capital efficiency.

Speaker #5: Thank you . Operator . And good morning , everyone . Good to see solids rewards contribution in three Q revenues . And my question is about the current multiple to net asset value .

Speaker #5: Trading stock is at a discount right now. Could you provide any details on what initiatives you consider besides just share buybacks?

We've built an incredible team of institutional experts, who are constantly looking at opportunities.

<unk> business development opportunities as well as capital market opportunities when we're in a period, where our NAV is trading at a discount we will publish.

Speaker #5: Any color on your priorities would be helpful . here Thank you .

Speaker #2: Sure. I think we are through a challenging period, which we hope is temporary, where many Treasury digital asset treasuries are seeing some compressed multiples to their NAVs.

Publicly disclose further details into our methodology for competitive purposes, but at the end of the day, we are focused on increasing <unk> per share concentration and we've disclosed that it's more than doubled from two point out a four point out through our disciplined capital management.

Speaker #2: do think it provides us with an opportunity to do two things which are really , really important . When you put shareholders first , we are set up to basically be able deal to not only ETH price with volatility , but even when when our Nav is trading as a discount , our goal to continues be eath per share .

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 one we have to be careful in terms of how we can raise equity, but you would have seen the unique fund raising opportunity. We took advantage of in October and we are going to continue doing the right thing for investors, but with a focus on east concentration again.

Speaker #2: growth And when our market multiple Nav is above one , we can issue equity to purchase more shares . When it's below one , we can buy back stock and you would have seen that in August .

Speaker #2: Our board approved a stock buyback program . And both of these actions are creative . So in this space volatility can become an opportunity to capture value and not always a constraint .

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 the color and my follow up is.

Speaker #2: 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 looking at opportunities constantly , both business development opportunities as well as capital market opportunities .

Has the macro in nature.

And this question is probably for Joe Lubin.

Maybe many investors.

View of Salina as a competitor to <unk>.

Citing its transaction speed and low cost.

Key advantages.

How can if you want to preserve its leading position in the face of this competition and Additionally could you provide more details about.

Speaker #2: 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 .

December upgrade and what what's the main updates will include just briefly if you can frame it up thank you.

Speaker #2: 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 .

Yeah.

Let me start with the second piece.

Data availability sampling.

Is it.

One of the major upgrades.

And that's going to enable.

Speaker #2: I appreciate the fact that we are in a position where we could raise capital in multiple ways when our multiple to Nav is below one , we have to be careful in terms of how we can raise equity .

Nodes on the network to the need to hold less data.

But.

<unk> enabled the amount of blobs are binding binary large objects.

To grow significantly.

And there's also an upgrade that enables them to start to grow.

Speaker #2: 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.

Hum.

Yes.

As a result of essentially something like monthly activity.

Speaker #2: Again , we are not providing guidance or detail on how we would execute on our capital market strategy or share buybacks at this time .

That.

Hum.

Parameter.

East upgrading and so.

Blogs as well as gas limits will be upgradable.

Speaker #5: I appreciate this color and my follow up is has a macro nature . And this questions probably for Joseph Lubin maybe many investors view of Solana as a competitor to Eve , citing its transaction speed and low cost as the key advantages .

On a very regular basis, so thats going to.

Enabled greater scalability and Bill Slater ones one in later too.

Our.

Cerium.

The whole ecosystem.

Speaker #5: And how can Ethereum preserve its leading position in the face of this competition and additionally , could you provide more details about if December upgrade and what what the main updates will include ?

Is growing pretty dramatically and its scalability.

And.

We already see networks on the theory on that.

Significantly rival or beat so London's transaction throughput.

Speaker #5: Just briefly , if you can frame it up ? Thank you .

Project.

Coming online rapidly Mega East operates at speeds.

Speaker #1: Sure . Let me start with the second piece . Data availability sampling is is one of the major upgrades , and that's going to enable us nodes on the network to need to hold less data .

I believe are significantly in excess in terms of transaction per second throughput of Solana.

The phone numbers actually include.

In their transaction per second throughput.

Essentially they're voting mechanism what youre not.

Speaker #1: But it'll 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 .

Actual transactions initiated by the users so well.

We will see pretty soon the total transaction throughput.

They are in the ecosystem.

Clips Solana is doing and we have.

Speaker #1: As a result of essentially something like monthly activity that it's called the parameter based upgrading . And so both blobs as well as gas limits will be upgradable on a very regular basis .

Compose ability enhancements, which will enable.

Transactions and operations across different later twos and across later one.

Two.

The various modes and to have a very low latency and between them. So we will start to see applications being built that.

Speaker #1: So that's going to enable greater scalability at both layer one's one and layer two . Ethereum . The whole ecosystem is growing pretty dramatically in its scalability and we already see networks on Ethereum that that significantly rival or beat .

Access multiple layer two networks that layer one in roughly the same operation.

And it's worth noting that.

If you look at the most recent figures.

Stable coins, which is probably the fastest growing area of digital assets with over 300 billion.

Speaker #1: Solana's transaction throughput . A project that's coming online rapidly . Mega eath operates at speeds that I believe are significantly in excess in terms of transaction per second throughput .

Over 60% of all stable client activity is happening on the theory and its ecosystem theory has last time I looked approximately 10 times.

As much stable coin activity is silvana over 80% of token is real world assets, which we believe is going to be the next driver of growth is happening on our cereal and if you look at the high quality liquid asset activity happening in the decentralized finance space.

Speaker #1: Solana , the Solana numbers actually include in their transaction per second throughput as essentially they're voting mechanism , which are not actual transactions initiated by users .

Speaker #1: 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 two's and across layer one to the various and to have a very low latency in between them .

The majority is happening on this area. So we feel quite confident that institutional real activity is going to be dominated by this theory and ecosystem. Despite some of the marketing and prior hype.

Around so long.

Thank you very much.

Okay.

Sorry, another important point to make is that.

Many users.

Don't need.

Speaker #1: So we'll start to see applications being built that access layer two multiple networks on layer one . In roughly the same operation .

Incremental transactions per second throughput.

These networks are sufficiently capable of handling the volume with a lot of use cases do require is reliability and nothing comes close to the 10 years of.

Speaker #2: And fedora , 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 .

Time non interrupted uptime.

Two months.

Thank you very much Joe Joseph and the team I appreciate all the color.

Speaker #2: Over 60% of all stablecoin activity is happening on Ethereum . And its ecosystem . Ethereum has . Last time I looked approximately ten times as much stablecoin activity as Solana .

And best of luck.

Yeah.

Thank you. Our next question comes from the line of Kevin Dede with H C. Wainwright. Please proceed with your question.

Thank you good morning, Gents appreciate being on the call.

Speaker #2: Over 80% of tokenized real world assets , which we believe is going to be the next driver of growth , is happening on Ethereum .

Mr. Rubin apologies for dragging you back over the upcoming upgrades.

But I'm curious given your insight how you see them progressing.

Speaker #2: And if you look at the high quality liquid asset activity happening in the decentralized finance space , the majority is happening on Ethereum .

I know the merge pushed to the right on numerous occasions and I'm wondering if.

Speaker #2: So we feel quite confident that institutional real is activity going to be dominated by the Ethereum ecosystem , despite some of the marketing prior and hype around Solana .

You are in negotiations with financial services institutions, whether or not that.

Potentiality affects discussion of <unk> versus <unk>.

Speaker #5: Thank you very much .

Speaker #1: Point . Sorry . Another important point to make is that many users don't need incremental transaction per second throughput . These networks are sufficiently capable of handling the volume .

So in terms of being able to land upgrades on time.

If they're in the ecosystem has significantly matured on that front and foundation.

It is almost a brand new foundation it is.

Speaker #1: What a lot of the use cases do require is reliability , and nothing comes close to the ten years of uptime Non-interrupted uptime that provides .

Firing on so many new cylinders and the.

The level of breadth.

Addressing an excellence at which it's operating.

Incredibly exciting to all observers from <unk>.

Speaker #5: Thank you very much , George and the team appreciate all the color and continue . Best of luck .

Deep inside the ecosystem and hopefully from outside of the ecosystem.

So.

We're targeting more than one major upgrades to the a certain protocol.

Speaker #4: Thank you . Our next question comes from the line of Kevin Didi with H.C. Wainwright . Please proceed with your question .

For you hopefully landing on an average of two 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.

Speaker #6: Thank you . Good morning gents . Appreciate being on the call . Mr. Lubin . Apologies for dragging you back over the upcoming upgrades , but I'm curious , given your insight , how you see them progressing .

After some software the glimpse to them upgrades will probably land somewhere around six to eight months after casaca loans in December.

Speaker #6: I know the merge pushed to the right on numerous occasions , and I'm wondering if in your negotiations with financial services institutions whether or not that potentiality affects discussion of ETH versus Solana .

And.

As I indicated before we decoupled.

A bunch of the day.

The upgrade.

Trajectories from the mean.

Zenner of immune scheduled so that we'll be able to upgrade the number of blocks are binary large objects.

Speaker #1: 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 brand new—a foundation.

On their own pace, and we're going to be able to upgrade the gas limits on its own pace and so we'll look to do.

A number of those decoupling unparallel developments over time.

As always.

When we.

Speaker #1: It is firing on so many new cylinders the level of 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 .

Due to the work we're doing the work for the next few major upgrades. These things take time and we got many many teams.

A number of different clients.

That are always working in parallel and <unk>.

And on upgrades.

Picks from the priorities that need to be addressed and the level of maturity.

Speaker #1: So we're targeting more than one major to the upgrade Ethereum protocol per Hopefully year . landing on an average of two . And we're on track to accomplish that this year .

That.

Thread.

To determine what actually ends up in upgrades.

Also in terms of.

Speaker #1: We're looking like we're on track to accomplish that next year . We do expect after the Amsterdam upgrade will probably land somewhere around 6 to 8 months .

How financial institutions impact the.

Upgrade cycle.

I would argue that financial institutions are starting to be a forcing function in what they are doing ecosystem.

Speaker #1: After Kusaka lands in December and as I indicated before , we've decoupled a bunch of the the upgrade trajectories from the main agenda of the main schedule so that we'll be able to upgrade the number of blobs or binary large objects on their own pace .

Considers necessary to include in the protocol.

Things like enhancements.

To reduce the delays on the stake in Q.

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 the roll up centric roadmap.

Speaker #1: And we're going to be able to upgrade the gas limits on its own pace . And so we'll look to do a number of those decoupling in parallel developments over time .

Much of the activity of financial institutions will be lending.

Later twos later to have their own upgrade schedule and often.

Speaker #1: 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 and an upgrade picks from the the priorities that need to be addressed and the level of maturity that that thread to determine what actually ends up in an upgrade .

Their own technologies, and so that's sort of modularity enables the Syrian protocol proper to have.

Great schedule and activities that are decoupled from the needs of.

Different institutions that are making use of the technology. It later too so.

No delays would be caused by us paying attention to the needs of financial institutions, and just improvements would be driven by that.

Uh huh.

When you look at the entire cerium ecosystem.

Speaker #1: I'm also yeah , 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 .

And some of the large treasury companies evolving I mean, I know you know the mall bit mine yourself.

The <unk> machine, all accumulating massive amounts of the token.

How would you recommend we look at the inflation characteristics.

Speaker #1: Things like enhancements to reduce the the delays on the staking queue are a very important one . That is being addressed . And and we've written specifications to to handle that .

Of token issuance.

So also.

I can jump in there.

Josef do you want to start.

Speaker #1: And essentially solve that problem . But other than that , because of the the roll centric roadmap , much of the activity of financial institutions will be landing at Layer twos .

So Joe why don't you go on token.

Inflation in all our chartered quite competition or what I call co op petition.

Yeah.

So.

The purion.

Issuance schedule.

Speaker #1: Layer twos have their own upgrade and schedule often their own technologies . And so that's sort of modularity enables the Ethereum protocol proper to have an upgrade schedule and activities that are decoupled from the needs of of different institutions that are making use of the technology at layer two .

Has expected inflation below 1% annually I think it's a little bit below bitcoins and.

Massively below salon hours, which I think is.

I forget what it is but it's probably in the range of 6%.

8%.

Our firm as it gets busier.

Burns either with every transaction, we do issue either.

Speaker #1: So no delays would be caused by us paying attention to the needs of financial institutions and just improvements would be driven by that .

Some of those.

Validators.

<unk> blocks.

But.

You can expect that.

Speaker #6: When you look at the entire Ethereum ecosystem and some of the large treasury companies evolving, I mean, I know you know them all.

The Max that could be issued in a year.

There is effectively no burning I believe is I think around.

Speaker #6: Bitmain yourself , Zilla , the ETH machine , all accumulating massive amounts of the token . How would you recommend we at the look inflation characteristics of token issuance ?

One 5%.

And.

And Brian Allman.

Certainly going to be.

Below 1%.

I haven't looked recently, but my guess is it's probably around 7% to eight.

8%.

What we need to that Andy.

And again as the network gets busier and busier, we will be burning more either.

Speaker #1: So I can jump in there . Joseph , do you want to start ?

We'll move to net zero issuance when the network is really busy and we will move to <unk>.

Speaker #2: Nope . Joe , why don't you go on token inflation and I'll I'll chat about competition or what I call competition .

Excuse me, we will move to being deflationary when the network gets very busy and it's not just the <unk>.

Speaker #1: Yeah . So the Ethereum issuance schedule has expected inflation below 1% annually . I think it's a little bit below Bitcoin's and and massively below solana's , which I think is I forget what it is , but it's probably range of 6% to 8% .

Room network.

Layer one difference either.

They are too.

The network is running <unk> and <unk>.

We look to see.

Other projects taken.

Taking up that mechanic.

Start burning.

Ether as well on different networks and so my colleague.

Informs me that that was pretty close.

Speaker #1: as it gets Theorem busier burns ether with every transaction we do issue ether to incentivize validators to to build blocks . But you can expect that the max that could be issued in a year net if there's no burning , I effectively believe is I think around 1.5% and and we're almost certainly going to be below 1% .

And if they are in.

In.

Inflation rate is around.

8%.

Yes, I remember.

Yes, it was deflationary after the merger.

Geez I want to say almost a year for.

For a while yes exactly.

Okay, and Kevin I, just wanted to add from a sharply perspective, you spoke about some of our.

Competitor to your digital assets treasuries in the CRM ecosystem, we view that as actually very positive and a validation of the macro investment thesis.

Speaker #1: I haven't looked recently , but my guess is it's probably around 0.7% or 0.8% . Please don't hold that me to . And again , as the as the network gets busier and busier , we'll be burning more ether .

Joe and I have been speaking about co op petition is actually very good.

One of the most important things <unk> seen since the launch of this wave of digital also treasuries in the theorem ecosystem since May and June is a complete.

Speaker #1: We will move to net zero issuance when the network is really busy and we'll move to excuse me , we'll move to being deflationary when the network gets very busy and it's not just the Ethereum network .

And the level of.

Mind share and conversation not only about our cereal, but institutional adoption that's happening on a theory and that mind share I think had been lost for a period of time to decline and so on it and I think we've regained that pole position.

Speaker #1: Layer one that burns ether . They are two linear network is burning ether and and we look to see other projects taking up that mechanic .

I would say, we're trying to differentiate ourselves from our peers and we respect in a few ways. One is we are building as I shared.

Speaker #1: And and start burning ether as well on different networks . And so my colleague informs me that that I was pretty close , that Ethereum's annual inflation rate is around 0.8% .

Strongest in house team with expertise to manage the vast majority of our EES any staking and when you can do it on teen more of.

The yield in Europe to the benefit of our shareholders.

So youre not paying out one two or even a higher percent of your NAV every year.

Speaker #6: I remember it was yeah , it was deflationary . After the merge for geez , I want to say almost a year .

Third party asset managers, we use them selectively and second is our team in conjunction with our advisors at consensus we're already 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 <unk>.

Speaker #1: For a while . Yes , exactly .

Speaker #2: Yeah . And Kevin , I just want to add from a sharp link perspective , you you spoke about some of our competitor or peer digital asset treasuries in Ethereum ecosystem .

Speaker #2: We view that as actually very positive and a validation of the macro investment thesis that Joe and I have been speaking about . Competition is actually very good .

Census, who know how to do that and we are going to be committed to the north star.

Which is increasing east concentration and making sure throughout this process even through volatility of the price of either 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.

Speaker #2: One of the most important things you've seen since the launch of this wave of digital asset treasuries in the theorem ecosystem , since May and June , is a complete change in the level of mindshare and conversation , not only about Ethereum , but institutional adoption .

And I hope the entire industry as well.

That will be really really good for <unk>.

Speaker #2: That's happening on Ethereum and that mindshare , I think , had been lost for a period of time to Bitcoin and Solana . And I think we regained that whole position .

Not only just gearing ecosystem, but hopefully for the long term price of ether, which secures the transactions on the <unk>.

Thank you Josef I appreciate the color I was curious about the collective impact on token issuance and burn.

Speaker #2: I would say we're trying to differentiate ourselves from our peers, whom 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.

Because I mean this is unprecedented in ethers 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.

Speaker #2: And when you can do it on team , more of us , the yield inures to the benefit of our shareholders . So you're not paying out one , two or even a higher percent of your Nav every year to third party asset managers .

On that note of working in house would that include at some point that sharp link starts running its own validate or nodes.

Speaker #2: We use them selectively . And second is our team in conjunction with our advisors at consensus . We are going to be differentiating ourselves on yield generation and finding the best opportunities .

I think we.

We started our east Treasury strategy in late May early June you would have seen tremendous progress staking nearly a 100% of our east.

Speaker #2: And to do it in a really risk managed way , because we have a team of experts , along with consensus , who know how to do that , and we are going to be committed to the North Star , which is increasing ETH concentration and making throughout sure 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 So investors .

Accumulating over $3 billion of you doing unique things in the ecosystem like our partnership announcement with consensus linear.

The intent to token is our public equity.

With our.

Collaboration with Super Safe.

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 operating companies.

Speaker #2: we welcome the competition . It's a validation of the thesis , and I hope the entire industry does well because that'll 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 .

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.

Speaker #6: Thank you . Joseph . 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 huge such accumulation held in Treasury versus necessarily working on the transaction side .

Over time, we will evolve our operating business, but we have nothing to share on today's call Kevin Great question.

Okay.

Thank you for that.

I did ask you after the June quarter call. So I appreciate that.

<unk> of sort of compressing.

Speaker #6: But I appreciate the color . Thank you for that . On on that note of working in-house , would that include at some point that sharp link starts running its own validator nodes ?

Premiums to NAV.

Wondering.

Mr Shlomi, how you're viewing issuing preferreds versus converts.

And I understand your financial service prowess and experience and I value your opinion.

Speaker #2: I think , you know , we started our Treasury strategy in late May , early June . You would have seen tremendous progress staking nearly 100% of our ETH .

Sure Kevin I think.

The beautiful thing about doing this through a structure or 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 has primarily been for issuance of common equities.

Speaker #2: You know , accumulating over $3 billion of ETH doing unique things in the ecosystem , like our partnership and announcement with consensus and Linea , the intent to tokenize our public equity .

Speaker #2: 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 .

You mentioned, two others convertibles and other equity linked securities or press. There are certainly tools in the toolbox that can enable us to capture value from both east volatility.

As well as investors, who may be seeking exposure to that volatility.

Speaker #2: I think we will 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.

In both those instances, we would be able to issue those capital structures without diluting shareholders, even when we're trading below NAV.

Speaker #2: Over time , we will evolve our operating business , but we have nothing to share on today's call . Kevin . But great question .

We do view those Kevin as complementary tools to our at the market and stock buyback strategies.

Speaker #6: Okay , well , thank you for that . 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 Shalom , how , Mr. you're viewing , issuing Preferred's versus converts .

And as I said before the fact that our reserve asset ether as volatile as actually a plus and there are many ways as you've described to monetize that volatility while enhancing liquidity and each exposure, we're not going to comment on today's call about share buybacks or our future.

The capital raise but there are those are two very good tools in our toolbox.

Speaker #6: And I understand your financial service prowess and experience . And I value your opinion .

And we're constantly looking at these opportunities to see how we can both raised capital and allow ourselves to capitalize on the volatility of our offsetting both converts and trust our tools we're considering.

Speaker #2: 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 .

Awesome. Thank you very much gentlemen, appreciate the additional color and congrats on the progress.

Thank you, ladies and gentlemen that concludes our time allowed for questions I'll turn the floor back to Mr. <unk> for any final comments.

Speaker #2: You mentioned two others , convertibles and other equity linked securities or prefs . They 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 .

Thank you all in conclusion, I really want to thank everyone for joining us today and for your continued support and confidence and sharp lengths long term vision. We are really proud of the progress. We've made in this third quarter, our first full quarter of being in a theory treasury strategy.

Speaker #2: And both in those instances , we would be 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 we're very excited about what's ahead I need to thank our team who has worked relentlessly.

Over this period in building and accumulating and staking, our east and doing it as you would expect in a risk managed way from an institutional steward.

Speaker #2: 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 .

Billions of dollars of these on our balance sheet and we look forward to speaking with you again on our next earnings call.

Speaker #2: While enhancing liquidity in Neath exposure . We're not going to comment on today's call about share buybacks or our future capital raise . But there are those are two very good tools in our toolbox .

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

Speaker #2: And we're constantly looking at these opportunities to to see how we can both raise capital and allow ourselves to capitalize on the volatility of our And asset .

Speaker #2: converts and both press our tools were considering .

Speaker #6: You are very awesome. Thank you much, gentlemen. I appreciate the additional color, and congrats on the progress.

Speaker #4: Thank you , ladies and gentlemen , that concludes our Allowed for questions , I'll turn the time . floor Mr. Shalom for any final comments .

Speaker #2: Thank you all . In conclusion , I really want to thank everyone for us joining today and for your continued support and sharp confidence in links , long term vision .

Speaker #2: We are really proud of the progress we've in made this third quarter . Our first full quarter of being an Ethereum Treasury strategy , and we're very excited about what's ahead .

Speaker #2: I need to thank our team, who have worked relentlessly over this period in building, 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 in ETH.

Speaker #2: 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 ETH . of On balance sheet .

Speaker #2: look forward to speaking with you our next earnings call again on .