Staking technology provider Kiln has closed a $17.8 million fundraising round involving companies including Consensys and Kraken Ventures. The company foresees “exponential” growth in demand for ETH staking services from institutional clients in the future.
Kiln is a software-as-a-service provider focused on enterprise-grade staking solutions across 16 different Proof-of-Stake (PoS) blockchain protocols. Its infrastructure allows users to stake on-chain while maintaining custody of the assets in stand-alone solutions, as well as cloud platforms and validator clients.
An announcement shared with Cointelegraph describes the increasing institutionalization of cryptocurrency staking as a market trend. According to Kiln, this is driving the need for “validator-independent APIs and services” to enable multi-vendor betting.
Cointelegraph has spoken with Kiln co-founder and CEO Laszlo Szabo to unravel the need for multifaceted staking services. Major exchanges and service providers like Coinbase, Ledger, and Binance are serving an increasingly institutionalized staking market, according to Szabo, and need to interact with multiple staking providers to spread operational risk:
“The old-fashioned solution is to manage relationships with staking providers independently, leaving it to the product and engineering teams of leading companies to integrate the different staking providers into their workflows.”
Integration of new protocols for staking now requires custom lock and unlock transactions for each individual protocol format, as well as running a data collection infrastructure and custom custodial API integration.
This is one of the main reasons why Kiln has created a suite of products that allow wallets, custodians, and exchanges to manage multi-vendor staking.
Ethereum’s recent transition to consensus proof-of-stake (PoS) also leads Sazbo to believe that demand for ETH staking will “grow exponentially.” His company cited data from other PoS protocols that see between 50% and 80% of assets locked up, compared to 12.5% of the total ETH supply currently locked up in the Beacon Chain contract.
Kiln already services institutional clients, such as Ledger, Binance US, and GSR. Its intention is to go to market with these companies focusing on the institutional segments, including funds and banks.
Szabo also told Cointelegraph that the firm is in talks with major traditional financial institutions that are preparing comprehensive cryptocurrency-related products and exploring staking solutions:
“They are past the discovery phase and are making significant progress, although the processes are long with these types of players.”
Ethereum staking is currently an integral part of how the smart contract PoS blockchain works on a daily basis. There are a number of staking options available to prospective users, but a total of 32 ETH is required to become a network validator and provide staking rewards.
Ordinary users who wish to stake a smaller amount of ETH can participate in staking pools or solutions offered by centralized exchanges.
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