Institutional staking of crypto assets, including post-merger Ethereum, could become a phenomenon in the future, but not while those assets need to be locked up.
Speech at Q2 Earnings During a conference call on Aug. 9, Chief Financial Officer (CFO) Alesia Haas said the new exclusive institutional staking service rolled out in the second quarter will be a truly liquid staking. He said he didn’t expect it to become a “short-term phenomenon” until it became an option. Available.
This is the first time we offer a product. Previously, the only way institutions could access staking was through Coinbase Cloud. […] However, we are offering it as a delegated staking service similar to what we offer for our retail customers.
However, Haas said the new staking service is still in its early stages and will only have substantial impact if it creates a liquid staking option for post-merge Ethereum, also known as ETH2. He added that it is likely to see
Liquid staking is the process of locking funds for staking rewards while accessing them.
Haas explained that many financial institutions “do not want to hold assets indefinitely.”
So when you stake ETH2, you lock your assets in Ethereum until the merge, and then some time later. For some financial institutions, this liquidity lockup is unacceptable. There may be, but we would like to stake into liquid assets.
Haas reaffirmed that this issue is “something we are trying to solve” and said that once this liquid staking becomes available to financial institutions that can pool a higher percentage of funds, “We will see a real material impact on institutional investors’ earnings,” he added.
Related: Coinbase Partners With BlackRock To Create New Access Points For Institutional Crypto Investing
Investors and institutions can now access Coinbase’s delegated staking service through ‘Coinbase Prime’, which first launched in September 2021. The platform also offers other integrated services such as access to security-enhanced custody wallets, real-time cryptography, and more. Other crypto-native features such as market data and analytics, and decentralized governance.