Blockchain firm RockX unveils institutional platform for liquid stakes
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RockX, a Singapore-based blockchain company, is looking to attract institutional investors to liquid stakes with its new service, Bedrock.
In addition to offering staking services to retail clients, Bedrock offers institutional quality know-your-customer (KYC) and anti-money laundering (AML) compliance to institutions looking to stake more than 32 ether (ETH) ($57,000), RockX said in a email Wednesday.
The company is initially targeting exchanges and wealth management platforms, with the aim of attracting large funds and banking institutions further down the line, founder and CEO Chen Zhuling told CoinDesk in an interview. Crypto trading firm Amber Group, a RockX investor, will be one of Bedrock’s first customers.
Staking is a means of earning returns on digital assets, where crypto holders can unlock their tokens to secure proof-of-stake blockchains in exchange for a reward. With liquid stakes, investors keep their capital liquid and use their staked tokens as collateral by receiving derivatives.
Last month, liquid stakes became the second largest crypto sector as its total value of locked assets reached $14.1 billion, surpassing $13.7 billion on decentralized lending and borrowing protocols. Liquid staking platform Lido Finance has become decentralized finance’s largest protocol with around $10 billion worth of digital assets locked on the platform.
The catalyst for floating stakes is the Ethereum blockchain’s Shanghai upgrade, which will allow stakers to withdraw the ether (ETH) they have staked and for which they have accumulated rewards. The expectation is that Shanghai will strengthen ETH by establishing a blueprint for staking protocols and give users more confidence in their sovereignty over their assets.
However, there have been doubts about the appetite for liquid bets among financial institutions, especially in the Asian market closest to RockX. David Cicoria, Hex Trust’s head of market technology for digital assets, recently said institutions are missing out because of risks of depegging, hacks and a lack of regulatory clarity.
Zhuling agreed that institutions have some of these concerns, but emphasized the important distinction between custodial and non-custodial services. Bedrock falls under the latter.
“We have no ETH at all. All ETH is held in a smart contract and then distributed to validators,” he said.
“It is very easy to count how many coins are held in the pool and from there are passed on to validators, so there is no risk of inflation of the numbers or misuse of assets,” he added.
Read more: Lido Finance Weighs Sunset Liquid Staking on Polkadot, Kusama