Lido targets institutions with new white-glove staking service
The liquid staking giant wants to onboard the next wave of institutional players into Ethereum
Qeeraw/Shutterstock modified by Blockworks
Lido is introducing Lido Institutional, a B2B-focused white glove service targeted at large customers like crypto funds and asset managers with ETH.
Today, institutions can theoretically stake ETH on Lido by themselves. What Lido’s new initiative aims to address are the anti-money laundering and know-your-customer concerns of institutional clients, allowing them to stake and mint new stETH with no transaction history, thereby avoiding the commingling of institutionally-owned stETH with stETH by Lido’s retail users.
Lido is the largest liquid staking platform, controlling 28.75% of all staked ETH on Ethereum, according to Dune data. That’s down from its staking share peak, which at one time approached a third of all staked ETH.
Lido Institutional is the liquid staking giant’s latest efforts to grow stETH adoption by building an ecosystem around qualified custodians, MPC wallets and various tech partners.
For instance, Lido’s partnership with Fireblocks allows institutional clients to select Lido as a staking provider to stake their ETH, and is set to go live at the end of the month. Institutional-minted stETH collateral can then be used in integrations with centralized exchanges like Deribit, which enables institutional clients to use stETH for off-exchange settlement, according to Lido’s Institutional Relations Lead Kean Gilbert.
“About 25% of Lido’s TVL today comes from institutional players, and we want to bring on the next 25% with dedicated institutional services focused on them,” Gilbert told Blockworks.
Lido’s institutional-focused product is also a competitive play on the recently launched ether ETFs that lack a staking component, enabling clients to capture the full 3-4% yield of Ethereum Beacon Chain rewards.
Laser Digital, a digital asset subsidiary of Nomura, is also planning to launch an ETH ETF alternative that would return Beacon Chain rewards to stakers.
Lido’s offering is a more decentralized approach to supporting institutions staking goals — because its operator set contains multiple independent entities — yet smooths over rough edges for institutions when it comes to support.
“The BlackRocks and Fidelities of the world are not going to log a ticket on Discord and deal with anonymous contributors,” Gilbert said.
Updated August 7, 2024 at 12:55 pm ET: Clarified timing of Fireblocks/Lido partnership launch.
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