GameSquare to Launch $100M Ethereum Treasury Targeting 14% Yields

GameSquare has unveiled plans for a $100 million Ethereum treasury targeting a 14% yield through a decentralized finance (DeFi) strategy.

Following the news, its shares surged by nearly 60%.

GameSquare’s Offering

In a July 8 press release, the company announced it has priced an underwritten public offering of 8,421,054 shares of its common stock at $0.95 per share. The offering is expected to raise approximately $8 million in gross proceeds before deducting underwriting discounts, commissions, and other offering expenses.

The Minneapolis-based firm said the funds will be used to kickstart a $100 million Ethereum treasury strategy. The initiative is aiming for yields between 8% and 14%, which is higher than the current 3% to 4% returns offered by regular ETH staking.

“Today’s announcement reflects the confidence of a proven group of high-quality investors and leaders in decentralized finance,” said GameSquare CEO Justin Kenna.

He expounded that the plan will increase the company’s financial flexibility and support a clear capital allocation plan focused on acquiring more ETH, funding potential share repurchases, and reinvesting in growth initiatives.

GameSquare’s ETH treasury will be supported by a strategic alliance with Dialectic, a crypto-native capital management firm. This platform uses machine learning, strong risk controls, and automated optimization to deliver better risk-adjusted returns. Lucid Capital Markets is also serving as the sole underwriter for the plan.

“We’ve partnered with one of the world’s top crypto investment firms to generate real, on-chain yield while deepening our expertise in decentralized finance, pursuing new revenue streams, and strengthening our balance sheet,” explained Kenna.

The next-gen media and entertainment platform also said that its treasury may include other yield-generating strategies in the Ethereum ecosystem, including using stablecoins and NFTs to increase and diversify returns.

Following the announcement, its share price jumped by nearly 60%. According to Google Finance data, the stock opened at $0.99, surged to a year-high of $1.69, before closing at $1.54.

More Firms Shift to Ethereum

The GameSquare news came as SharpLink Gaming, the largest corporate holder of ETH, added 7,689 ETH worth $19.2 million to its portfolio. The company now has a total of 205,634 ETH in its reserves, which it previously said is committed to staking and restaking protocols.

Sharplink has also introduced a new performance metric, ETH Concentration, which increased by 19% over the past three weeks.

Several other companies are now adopting Ethereum-based strategies. Bit Digital recently revealed it had transitioned its treasury to Ethereum, accumulating over 100,000 ETH. This move followed a $172 million public equity raise and the sale of 280 BTC.

CEO Sam Tabar said the move shows a long-term belief in the cryptocurrency’s programmable features and staking yield model, calling it the future of digital assets.