Institutions Moving into Ethereum Staking Post-Merge
In a deal that indicated Ethereum staking may rapidly industrialize, Delio Bank, South Korea’s largest Virtual Asset Service Provider, teamed up on Sept. 22 with blockchain infrastructure firm, Blackdaemon, to offer the service to retail users.
Blockdaemon will provide node management and staking services for Delio. It will allocate 32 ETH per validator node, meaning Delio will operate multiple nodes securing Ethereum.
Delio was approved to operate as a VASP in January of this year, becoming the only licensed firm to operate digital asset lending and deposit services. The company also obtained a money services business license to transmit money on behalf of U.S.-based customers.
Delio’s lending and deposit services drove $4.7B in volume during 2021. Blockdaemon hosts more than 35,000 nodes supporting over 60 different blockchain networks.
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The deal underscores mounting institutional interest in Ethereum staking, said Andrew Vranjes, Blockdaemon’s general manager in the Asia-Pacific region (APAC).
He told The Defiant the spike in demand is being spurred by the higher staking rewards available to validators following the chain-merge from Flashbots’ MEV-Boost software.
MEV-Boost allows validators to earn a share of the rewards generated through Maximal Extractable Value extraction, an arbitrage stratagem that exploits the order of transactions on blockchains. Early data suggests validators running MEV-Boost are earning an extra 135% in rewards compared to those not using the software.
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“MEV-Boost is proving to be a popular capability with institutional investors,” Vranjes said.
James Jung, the CEO of Delio Inc., said Ethereum’s reduced carbon footprint and expected deflationary supply prompted its move to introduce staking services.
“We are pleased to introduce 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 for users outside of Korea.”
Delio is promoting 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 firm has noticed an uptick in “large digital native and web 2.0 customers” signing up for staking service.
“We have customers in many countries in APAC, and continue to onboard customers in existing and new countries in the region,” Vranjes continued. “We are very focused on large crypto native customers and financial institutions.”