Demand for Ethereum staking has grown in popularity since the network switched to a proof of stake (PoS) system. With PoS, anyone can help secure the network by staking ETH to earn staking rewards. While running your own validator requires 32 ETH, many users choose liquid staking tokens (LSTs) for easier participation.
In 2023, staking gained more interest from institutions after Ethereum's Shapella upgrade allowed withdrawals. To make staking easier, various services are now tailored for institutional clients, allowing them to stake ETH without needing to manage complex systems.
Custodial staking services provide an easy way for institutions to stake ETH and earn rewards. These platforms handle everything, from managing funds to generating yield.
However, using custodians for institutional ETH staking comes with risks. Users may not have full insight into how their funds are managed, and if a service fails, there's a risk of losing deposited assets. Ethereum also "slashes" validators that break network rules, so it's important to choose reliable custodians.
Coinbase is a well-known name in crypto, offering a range of custodial services. Institutions can stake ETH using Coinbase Cloud, with an estimated 2.36% rewards rate. Coinbase charges a 10% fee for using their public validators. For dedicated validators, firms pay a subscription fee. While Coinbase is trusted, it doesn’t offer slashing coverage, which means if a node fails, stakers could lose funds.
Anchorage Digital, the first federally chartered crypto bank, offers compliant ETH staking for institutions. Users can stake batches of 32 ETH and earn rewards from block confirmations.
Anchorage focuses on institutional assets, making it appealing to large firms. However, firms should be aware of the platform’s management fees.
Fireblocks, launched in 2019, provides staking for ETH along with other crypto services.
Unlike other digital asset staking solutions, Fireblocks gives users full control over their private keys, meaning they have more oversight over their investments. This "direct" custody feature reduces counterparty risk, making it a popular choice for institutions.
Another option for institutional investors is to stake ETH using liquid staking protocols. With liquid staking for institutions, they put ETH into staking pools and receive a Liquid Staking Token (LST) in return. This token represents their original ETH and any rewards earned from staking. LSTs are linked to the value of ETH and can be used in other Ethereum based projects.
This lets institutions earn rewards while still being able to use their ETH. One popular platform, Lido Finance, manages over 30% of all staked ETH. But as more people stake ETH, the rewards are shared among more stakers, reducing the overall yield.
Origin Ether (OETH) solves this issue by offering higher yields. Currently, OETH offers a 4.34% trailing 14-day yield.
Users can deposit ETH and receive OETH, a highly efficient LST. OETH earns staking rewards from Ethereum and extra yield from providing liquidity on Curve and Convex. These rewards go straight to the user's wallet. The platform is safe, with its code audited by experts like OpenZeppelin, making OETH a strong choice for institutions looking to stake ETH securely.
Institutions can also opt to stake ETH directly via the smart contract. In doing so, firms can earn increased rewards on Ethereum’s proof of stake blockchain without relying on third parties.
However, this is a highly complex undertaking. Firms would need to set up and manage their own validator nodes, requiring substantial technical resources and a large amount of ETH. Considering that the network slashes nodes that break rules or face downtime, expert maintenance is critical for successful staking.
Furthermore, self-staked ETH is locked in the smart contract. This means that access to capital is limited, as the withdrawal process can take substantial time to execute.
Origin Ether empowers institutional stakers to earn outsized ETH rewards on the Ethereum network without the red tape of solo-staking or the risks of custody. OETH’s veteran team of innovators is dedicated to meeting the needs of institutional clients and asset managers.
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