Firms Combine for Improved Ethereum Staking
Posted by Colin Lambert. Last updated: February 1, 2023
B2C2 has unveiled a strategic collaboration with Blockdaemon and StakeWise to be the sole liquidity provider for the staked Ethereum token sETH-h, built on Portara, a permissioned liquid staking solution.
Since the merge in September, Ethereum has shifted from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism. Rather than employing resource-intensive computers to solve mathematical puzzles, Ethereum’s consensus mechanism now involves delegating ETH on the blockchain for the opportunity to validate transactions and earn more ETH as a reward – known as “staking”.
Withdrawals of staked ETH are due to go live in mid 2023 following the Shanghai Hardfork, currently, the staking of ETH is considered inefficient because the assets are ‘locked up’ until the hardfork is complete. The firms says this mechanism of locking up ETH with no withdrawal capability has created the need for liquid staking. Portara addresses this issue by delivering a liquid staking receipt token representing the staked ETH, which allows asset holders to immediately exit their staked ETH position through the secondary market and avoid any staking or unstaking processing queues, likely taking days, introduced by the Shanghai Hardfork.
It also allows them to earn rewards and unlock greater capital efficiency on staked ETH, which can be freely transferred and used as collateral when tokenised; and stake any amount of ETH efficiently, unconstrained by the 32 ETH staking requirement, and without the hassle of having to manage any validator nodes
Portara also integrates KYC and AML compliance features into its protocol, meaning the digital receipt tokens are only transferable on-chain between previously KYC/KYB permissioned addresses, which the firms say is critical as industry demand for transparency continues to rise.
With the alliance, Blockdaemon provides independent blockchain node infrastructure to stake, scale, and deploy nodes with institutional-grade security and monitoring, while StakeWise offers the smart contract platform that tokenises staked ETH deposits and rewards to unlock the liquid staking experience.
“Reliable liquidity across market conditions is essential for a healthy market,” says Nicola White, global CEO of B2C2. “As the world’s largest crypto liquidity provider, B2C2 is excited to help build support amongst EMEA and APAC clients for an innovative and critically important token. Not only will Portara help fill a large gap in the market, but it has KYC permissions embedded – an important feature for us and our clients.”
Chris Sharp, CTO of Blockdaemon, adds, “Liquidity is the lifeblood of any market and the truly innovative approach we have taken with Portara, our liquid staking solution, not only solves the liquidity issues leading up to the Shanghai hardfork but it’s a long term liquidity solution for institutions looking to leverage crypto positions while still earning rewards.”
Finally, Kirill Kutakov, co-founder of StakeWise, says “We are happy to see Blockdaemon, StakeWise and B2C2 uniting to bring liquid staking to institutions. Portara’s tokenisation and compliance features enable the movement of otherwise frozen capital between trusted market participants and unlock its value for the wider Ethereum ecosystem. It is great to have B2C2 supporting the liquidity for this solution going forward.”