Institutional participants for Ethereum 2.0 staking have started showing major interest even before the launch of the mainnet. Banking giants have started seeing the huge potential with staking services on the Ethereum blockchain network.
The Ethereum blockchain network is all set to undergo its biggest transition from the existing Proof-of-Work (PoW) to the Proof-of-Stake (PoS) blockchain. As the Ethereum 2.0 developments proceed ahead, banking institutions are also showing interest to run a staking node on the platform.
Some firms in the industry believe that banking participation in Ethereum 2.0 will grow with time. Besides, firms like Bison Trails and Blockdaemon are working on offering banks the infrastructure to run a staking node on Ethereum 2.0. These companies noted that big companies are showing strong interest in getting involved with Ethereum PoS.
“There are some large banks we’re working with, but the regulatory sequencing is important to them and so, unfortunately, we can’t name them at this moment,” said Konstantin Richter, founder and CEO of Blockdaemon.
There are several Ethereum competitors existing in the market that offer the PoS model. Some of the prominent names include Cardano, Polkadot, and Algorand. However, Ethereum still holds the edge by hosting a massive ecosystem of DApps, DeFi, and smart contracts. Thus, Richter notes that many are eagerly waiting for the transition to Ethereum 2.0 PoS.
Moving to the PoS model will allow ETH holders to earn interest on their ETH deposits in the wallet. This is much similar to the existing banking structure. Richter added:
“Ethereum 2.0 is a really big deal. You simply have a wallet with ETH and it’ll earn interest automatically”.
In exclusive news shared with CoinDesk, Switzerland-based digital asset bank Sygnum has started offering Ethereum 2.0 staking to its institutional clients. Sygnum’s ETH staking services locking up in multiple of 32 ETH for an undefined period and transition up to Ethereum 2.0.
Thomas Eichenberger, head of business units at Sygnum Bank said this service will generate a yield anywhere between 6.5% to 8% per annum. Eichenberger further added:
“Given its market cap and the importance of the network, Ethereum is getting a lot of attention among institutional clients who are not necessarily knowledgeable about the entire space, but want to focus on some of the largest coins as a first step”.
Sygnum’s institutional-grade staking service comes with bank-grade security. Sygnum has partnered with hardware security provider Securosys who will handle all the withdrawal keys. Eichenberger also noted:
“One of our target client segments is other banks. When we talk to these banks, there’s always a question about offering staking and on what tokens, and how can you make that available to us and our end clients as well.”
This is not the first time that Sygnum is offering such services to its clients. Previously, Sygnum has also facilitated a staking facility on the Tezos blockchain.
Another Swiss-based digital asset bank, SEBA Bank, is seeing rising client demand for Ethereum 2.0 staking.
“We at SEBA are on the cusp of launching staking services to our clients. Institutional staking is a game-changer because it blows traditional yield products out of the water,” said Matthew Alexander, SEBA’s head of digital assets.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
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