Anchorage Digital has made history as the first federally chartered bank in the United States to introduce liquid Ether (ETH) staking. This groundbreaking move enables institutional investors, such as venture capital firms, wealth managers, and blockchain protocols, to seamlessly participate in Ethereum’s staking ecosystem.
What is Liquid Ether Staking?
Liquid Ether staking allows users to stake ETH on the Ethereum blockchain while still maintaining liquidity through liquid staking tokens (LSTs). These tokens, like Liquid Collective’s Liquid Staked ETH (LsETH), represent staked ETH and can be traded or used in decentralized finance (DeFi) applications.
Anchorage Digital integrates directly with Liquid Collective, ensuring regulatory compliance and robust security for its institutional clients. This development aligns with Anchorage’s mission to provide cutting-edge digital asset solutions within a regulated banking framework.
Key Features of Anchorage’s Liquid Staking Integration
- Regulatory Compliance
- Anchorage Digital Bank operates under a federally chartered and regulated framework.
- It prioritizes Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols, ensuring secure and transparent staking solutions.
- Institutional Focus
- The service caters to institutional investors, such as venture capital firms and wealth managers.
- It provides direct access to liquid staking from Anchorage Digital accounts.
- Enhanced Staking Options
- Liquid Collective uses institutional-grade node operators like Coinbase and Figment to manage staking securely.
- Ethereum stakers currently earn an average annual percentage return (APR) of 3.5%, making it an attractive option for institutions.
The Broader Context: Liquid Staking’s Role in Crypto
Liquid staking tokens (LSTs) have become a vital component of the DeFi ecosystem, with a total value locked (TVL) exceeding $70 billion, according to DeFiLlama.
- Leading platforms like Lido dominate the market with nearly $40 billion in TVL.
- Liquid Collective, while smaller with $430 million in TVL, focuses on regulatory compliance and cybersecurity, making it a trusted option for institutions.
Staking in ETFs
The integration of staking solutions with exchange-traded funds (ETFs) is gaining momentum. Industry experts, such as Bernstein Research, foresee a future where staking yield becomes a standard feature in US ETH ETFs, driven by a crypto-friendly regulatory environment.
Why Anchorage’s Move Matters
Anchorage Digital’s foray into liquid Ether staking signals the growing institutionalization of cryptocurrency. By merging compliance, security, and innovation, Anchorage is paving the way for broader adoption of blockchain technology in traditional finance.
As regulated digital asset custodians like Anchorage, Fireblocks, and Coinbase Custody Trust continue to expand their offerings, the crypto ecosystem is becoming increasingly accessible and secure for institutional investors.
