Institutions getting into Ethereum staking post-merge
In an agreement that suggested Ethereum staking could quickly be industrialized, Delio Bank, South Korea’s largest virtual asset service provider, partnered with blockchain infrastructure firm Blackdaemon on Sept. 22 to offer the service to retail users.
Blockdaemon will provide Delio node management and staking services. It will allocate 32 ETH per validation node, meaning Delio will operate multiple nodes backing Ethereum.
Delio was approved as a VASP in January of this year, becoming the only licensed entity operating lending and deposit services for digital assets. The company was also granted a money services business license to transfer money on behalf of US-based customers.
Delio’s lending and deposit services generated $4.7 billion in volume in 2021. Blockdaemon hosts more than 35,000 nodes supporting over 60 different blockchain networks.
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The deal underscores growing institutional interest in Ethereum staking, said Andrew Vranjes, general manager of Blockdaemon in Asia Pacific (APAC).
He told The Defiant that the spike in demand is being spurred by the higher staking rewards available to validators after chain merging Flashbots’ MEV Boost software.
MEV-Boost allows validators to earn a share of the rewards generated by extracting the maximum extractable value, an arbitrage strategy that exploits the order of transactions on blockchains. Early data suggests that validators using MEV-Boost earn an additional 135% in rewards compared to those not using the software.
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“MEV Boost is proving to be a popular feature among institutional investors,” Vranjes said.
James Jung, the CEO of Delio Inc., said Ethereum’s reduced carbon footprint and expected deflationary supply prompted the move to launch staking services.
“We are excited to launch a staking service with Blockdaemon, a global blockchain company,” Jung told The Defiant. “We also aim to offer a variety of crypto-asset financial services to users outside of Korea.”
Delio sponsors NFT projects in partnership with the Seoul Design Foundation and Shinhan Financial Investment, a subsidiary of South Korea’s largest financial institution.
The news comes as Blockdaemon looks to expand its presence in the Asia Pacific region. Vranjes said the company has seen an increase in “large digital native and web 2.0 customers” signing up for the staking service.
“We have customers in many countries in APAC and continue to onboard customers in existing and new countries in the region,” continued Vranjes. “We are very focused on large crypto-native customers and financial institutions.”