Cryptocurrency-based institutional presence could increase for staking providers: Report

The Ethereum blockchain’s carbon footprint is expected to decrease by 99% post the recently held Merge event. By positioning staking as a service for retail and institutional investors, the upgrade could also have an impact on the cryptocurrency economy, according to a Bitwise report, as reported by Cointelegraph.

Insights from Cointelegraph stated that the company projected potential gains of four percent to eight percent for long-term investors through Ether (ETH) staking, while JP Morgan analysts expect that staking yields across proof-of-stake (PoS) blockchains could reach $40 billion by 2025. Users having the ability to stake cryptocurrency are able to earn rewards, through transaction fees paid by other network users. Reportedly, certain users see it a form of passive income generation, with staking requiring users to lock their assets in a smart contract, during which coins can’t be subjected to trading in the market. Institutional investors see it as a challenge with regard to the adoption of PoS blockchains.

On the basis of information by Cointelegraph, in a Q2 earnings call, Alesia Haas, CEO, Coinbase, highlighted that institutional staking of cryptocurrency assets could result into developments for the future post the market getting over its liquidity lock-up. Industrial players have reportedly given solutions with regard to addressing lack of liquidity around staked coins. Recently, Alluvial made the announcement of a liquid collective enterprise and multichain protocol with Coinbase and Kraken as integrators, and Staked, Coinbase Cloud and Figment as validators. 

“Proof of Stake blockchains make up more than half of the entire crypto market cap, yet, there hasn’t been a viable option for institutional token holders to participate in liquid staking,” Matt Leisinger, CEO, Alluvial, said in a statement. 

“Not only are investors diving head first into staking, but they are leveraging liquid staking services and the composability of DeFi to amplify the APY and utility of assets they are already staking,” the Bitwise report’s authors mentioned.

(With insights from Cointelegraph)

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