Anchorage Digital has become the first United States federally chartered bank to support liquid Ether (ETH) staking, it said on Dec. 5.
The cryptocurrency bank has added support for Liquid Collective’s Liquid Staked ETH (LsETH), a liquid staking token (LST) representing ETH staked on the Ethereum blockchain, Anchorage Digital said.
It expects to service US institutions — including venture capital (VC) firms, wealth managers, and blockchain protocols — directly from their Anchorage Digital accounts, the bank explained.
“This integration makes Anchorage Digital Bank NA the first [Options Clearing Corporation]-chartered, US-regulated bank to support participation in liquid staking,” Anchorage Digital said.
Source: StakingRewards.com
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Staking in ETFs
Institutional staking solutions are in hot demand as exchange-traded fund (ETF) sponsors anticipate possible approval of staking in US ETH ETFs.
On Dec. 2, Bernstein Research said US ETH ETFs may soon feature staking yield.
“We believe, under a new Trump 2.0 crypto-friendly [Securities and Exchange Commission], ETH staking yield will likely be approved,” Berstein said.
Staking involves locking up ETH as collateral with a validator on the Ethereum network. Stakers earn ETH payouts from network fees and other rewards but risk “slashing” — or losing ETH collateral — if the validator misbehaves.
Stakers on Ethereum earn approximately 3.5% annual percentage returns (APR) in ETH as of Dec. 5, according to StakingRewards.com.
Regulated digital asset custodians are proliferating in the US. They include Fireblocks, Coinbase Custody Trust, and Fidelity Digital Asset Services, among others.
In September, asset manager 21Shares added Anchorage Digital Bank and BitGo as custodians for its spot cryptocurrency ETFs.
Liquid staking tokens
Liquid Collective specializes in minting LSTs for institutions, prioritizing regulatory compliance and cybersecurity.
The LST protocol implements mandatory Know Your Customer (KYC) and Anti-Money Laundering (AML) checks and uses institutional node operators including Coinbase and Figment, according to Liquid Collective’s website.
LSTs command more than $70 billion in total value locked (TVL), according to DefiLlama. The most popular is Lido, which holds nearly $40 billion in TVL.
Liquid Collective is small by comparison, with approximately $430 million in TVL, per DefiLlama.
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