Staking Providers Could Expand Institutional Presence in Crypto Space: Report
Recent Ethereum update highlights staking opportunities for institutional holders. In the short term, however, liquidity remains an issue.
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The carbon footprint of the Ethereum blockchain is expected to decrease by 99% after last week's Merge event. By positioning staking as a service for retail and institutional investors, the upgrade could also have a significant impact on the crypto economy, according to a report from Bitwise on Tuesday.
The company said it expects potential gains of 4% to 8% for long-term investors from Ether (ETH) staking, while J.P. Morgan analysts expect staking returns on PoS blockchains could double to $40 billion by 2025.
Users who invest in crypto assets earn rewards, called returns, through transaction fees paid by other network users. Considered by some to be a form of passive income generation, staking requires users to lock their assets into a smart contract, during which coins cannot be spent or traded on the market. This can be one of the main challenges to the adoption of PoS blockchains, especially by institutional investors.
During a second quarter earnings call, Coinbase CEO Alesia Haas noted that institutional staking of crypto assets could be a “phenomenon” in the future as soon as the market overcomes its lockdown liquidity.
Industry players have offered a number of solutions in an attempt to address this lack of liquidity surrounding staked coins. On Sunday, Alluvial announced a liquid collective...
Recent Ethereum update highlights staking opportunities for institutional holders. In the short term, however, liquidity remains an issue.
New
The carbon footprint of the Ethereum blockchain is expected to decrease by 99% after last week's Merge event. By positioning staking as a service for retail and institutional investors, the upgrade could also have a significant impact on the crypto economy, according to a report from Bitwise on Tuesday.
The company said it expects potential gains of 4% to 8% for long-term investors from Ether (ETH) staking, while J.P. Morgan analysts expect staking returns on PoS blockchains could double to $40 billion by 2025.
Users who invest in crypto assets earn rewards, called returns, through transaction fees paid by other network users. Considered by some to be a form of passive income generation, staking requires users to lock their assets into a smart contract, during which coins cannot be spent or traded on the market. This can be one of the main challenges to the adoption of PoS blockchains, especially by institutional investors.
During a second quarter earnings call, Coinbase CEO Alesia Haas noted that institutional staking of crypto assets could be a “phenomenon” in the future as soon as the market overcomes its lockdown liquidity.
Industry players have offered a number of solutions in an attempt to address this lack of liquidity surrounding staked coins. On Sunday, Alluvial announced a liquid collective...
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