SharpLink’s $463M ETH Bet Triggers Stock Crash

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Good Morning.

I’m somewhat bullish as I think the WW3 risk is overblown (NFA), but it’s also because of the following chart. Now tell me what you would do instead.

Check out our latest podcast episode with Adrian from Chorus One.

In Today's Email:

• What Matters: SharpLink’s $463M ETH Purchase & Stock Crash 📉 

• Product of the Week: Bullet: Solana NE CLOB ⏩️ 

• Charts: $57M Trump’s WLFI Profit, ETH Inflow Streak Ends 📊

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WHAT MATTERS

SharpLink’s $463M ETH Bet Triggers Stock Crash

State of play: SharpLink Gaming (SBET), a Nasdaq-listed affiliate marketing firm, bought 176,270 ETH worth $463M, becoming the 2nd-largest ETH holder after the Ethereum Foundation.

• The purchase was fueled by a $425M private placement led by Consensys, with other backers including Pantera, Galaxy Digital, and Ondo Finance.

• SharpLink also raised an additional $79M from a separate share offering, aiming to grow its Ethereum treasury even further.

• However, its stock crashed over 70% after it filed an S-3 with the SEC, registering nearly 69M shares for potential resale.

• This triggered fears of dilution, despite reassurances from Chairman Joseph Lubin (also Consensys CEO) that the filing was procedural and not indicative of actual sales.

• The misunderstanding caused a wave of panic-selling, though the stock partially rebounded after clarification.

• Some speculate the firm may soon announce a much larger ETH purchase.

Our take: We’ll see more breakage in the equity wrapper system as the premium might eventually even turn into a discount.

For builders and investors: Be careful with the equity wrapper strategy; there’s still some opportunity, but it’s not free money anymore.

PRODUCT OF THE WEEK

Bullet: A Low-Latency Rollup for Real-Time DeFi

Bullet is an optimistic rollup developed on Solana by the team behind ZetaMarkets. It’s designed to support low-latency, high-throughput DeFi applications, starting with the Zeta X trading platform. Bullet is currently in closed testnet.

• Architecture: Bullet uses Solana for both settlement and data availability. It posts rollup data as blobs on-chain and anchors state using a zk-fraud proof-secured optimistic bridge.

• Performance: The sequencer is built for real-time responsiveness, currently achieving sub-50ms latency with a goal of reaching under 5ms.

• Decentralization Measures: A preferred sequencer model is used, but non-preferred sequencers can submit transactions. Failure to include them within a set time leads to slashing and a fallback to forced execution.

• Proofs: Bullet launches with zk-fraud proofs to verify state transitions. Bridging into the rollup is near-instant; bridging out has a 12-hour challenge window.

• Execution Model: The system runs without a virtual machine, allowing more direct control over transaction logic and API structure.

• Scalability Plans: The team plans to adopt a new database design (NOMT) to handle up to 40k TPS with large account sets. Initial throughput tests on Solana show capacity for about 7,800 order messages per second via batching.

Other cool products:

• DZap, an omni-chain liquidity layer.

• IceCreamSwap, an AI DEX aggregator.

• Benqi, a liquid staking + liquidity market protocol.

• StakeStone, an omnichain liquidity infrastructure.

• ZEROBASE, a zk-powered staking product on stablecoins.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 500 crypto VC individuals 👇

CHARTS OF THE WEEK

ETH ETF Inflow Streak Ends

State of play: US spot Ethereum ETFs ended their record 19-day inflow streak on Friday with $2.2M in outflows, largely due to rising geopolitical tensions between Israel and Iran.

• The reversal followed a sharp drop in crypto markets, with over $1.1B in liquidations and ETH falling 8% in 48 hours.

• Grayscale’s ETH fund logged $6.7M in inflows, while Fidelity’s FETH saw $8.9M in outflows. Despite the setback, total ETH ETF assets remain above $10B.

• In contrast, spot Bitcoin ETFs saw strong inflows of $302M, led by BlackRock’s IBIT ($239M), pushing total cumulative inflows to a record $45.6B.

Our take: This should only be temporary from the weekend WW3 FUD.

Trump Made $57M from WLFI Token Sales

State of play: President Donald Trump earned over $57.3M from World Liberty Financial’s WLFI token sales in 2024, according to his latest financial disclosure. Trump is listed as the project’s "chief crypto advocate" but holds no official role.

• He also holds 15.75B governance tokens, though valued modestly on paper.

• World Liberty raised $550M in its latest WLFI sale, selling 25% of its 100B supply.

• The project recently shifted focus to its USD1 stablecoin, airdropping tokens to WLFI holders.

Our take: Be cautious when interacting with all things in Trump’s crypto universe, he’s being opportunistic (rightfully so), and you don’t want to be naive.

QUICK BITES

• Metaplanet hits 10,000 BTC holdings.

• Bybit unveils its first Solana DEX, called Byreal.

• Charles Hoskinson proposes a $100M ADA investment.

• Prospective SOL ETF issuers submit updated S-1 filings.

• Trump made $57M+ from World Liberty Financial's WLFI sales.

• SEC clears Trump Media filing, opening door to $2.3B Bitcoin buy.

• SharpLink tumbles 70% after $425M raise for ETH treasury strategy.

• CoinShares reported global crypto funds add $1.9B in weekly inflows.

• Ethereum Foundation donates $500,000 to Tornado Cash Co-Founder.

• Spot Ethereum ETFs break record 19-day inflow streak with modest outflows.

NOTEWORTHY READS & MEME

• path.eth’s read on manipulation and price actions.

• FishMarketAcad’s read on $3B ideas for next-gen CLOB.

• Kairos Research’s read on Plasma: the stablecoin singularity.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.