Anchorage’s new service comes in expectation of the Ethereum network’s long-promised shift proof-of-stake agreement.
Anchorage Digital, a San-Francisco-based digital platform that preserves the first federally chartered crypto bank, will open an opportunity to stake the Ethereum (ETH) for institutions. This move comes in expectation of the Ethereum network’s long-promised shift from proof-of-work (PoW) to proof-of-stake (PoS) protocol.
Anchorage declares on Tuesday its purpose to introduce ETH staking — an exercise of earning rewards for serving as a transaction validator in the Ethereum blockchain — for institutions. Co-founder and president of Anchorage Digital, Diogo Mónica, called staking a win-win for institutional investors and the ecosystem:
“By paving the way for institutions to stake their Ethereum, we’re providing heightened legitimacy to market-tested assets–and in the process, eliminating any hot wallet risks for institutions looking to generate new earnings from crypto.”
The declaration stresses Anchorage’s high expectations from the upcoming upgrade of the Ethereum network that will connect its mainnet with the PoS system, corresponding by the Beacon Chain. This feature should let investors collect rewards on their ETH in custody by staking with an Anchorage validator. After the Merge, validators would earn not only the block rewards but also the transaction priority fees that were formerly going to miners.
The Beacon Chain was started as a part of Ethereum’s transitory roadmap in December 2020. In June 2022, Ethereum opened the Sepolia testnet, which would commence reaching consensus using PoS rather than PoW. The official merge date on the Ethereum mainnet has been postponed several times. It is now scheduled for completion by August 2022, but that date could be delayed further due to a separate delay in the difficulty bomb.
Last month, Anchorage created an exchange custody network with five digital asset trading platforms — Binance.US, CoinList, Blockchain.com, Strix Leviathan and Wintermute — to separate institutional client funds from exchanges into regulated asset vaults. Back in December 2021, a company secured $350 million in a backing round led by investment bigwig KKR.
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