Originally published on: December 05, 2024
Anchorage Digital made waves on Dec. 5 by announcing its support for liquid Ether staking, making it the first federally chartered bank in the United States to do so.
The cryptocurrency bank has integrated support for Liquid Collective’s Liquid Staked ETH (LsETH), a liquid staking token (LST) that represents ETH staked on the Ethereum blockchain, Anchorage Digital revealed.
In a strategic move, Anchorage Digital is set to cater to US institutions, such as venture capital firms, wealth managers, and blockchain protocols, directly from their Anchorage Digital accounts.
“This integration establishes Anchorage Digital Bank NA as the first US-regulated bank, chartered by the Options Clearing Corporation, to facilitate participation in liquid staking,” Anchorage Digital proudly announced.
Institutional staking solutions are currently in high demand, fueled by anticipation surrounding the possible approval of staking in US ETH exchange-traded funds (ETFs).
According to Bernstein Research, there is a strong belief that under a potential crypto-friendly Securities and Exchange Commission, US ETH ETFs may soon incorporate staking yield.
Staking involves locking up ETH as collateral with a validator on the Ethereum network, allowing stakers to earn ETH payouts from network fees and other rewards. However, stakers also run the risk of losing ETH collateral through slashing if the validator behaves improperly.
As of Dec. 5, stakers on Ethereum are enjoying approximately 3.5% in annual percentage returns (APR) in ETH, according to StakingRewards.com.
Regulated digital asset custodians continue to emerge in the US market, including prominent names like Fireblocks, Coinbase Custody Trust, and Fidelity Digital Asset Services.
Liquid Collective stands out in the field of liquid staking, specializing in minting LSTs for institutions while prioritizing regulatory compliance and cybersecurity.
With over $70 billion in total value locked (TVL), LSTs are gaining traction, with Lido emerging as one of the most popular choices, boasting nearly $40 billion in TVL.
Despite its relatively smaller TVL of approximately $430 million, Liquid Collective is making significant strides in the sector.
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