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Without staking, institutional crypto investors cannot escape inflation

CryptocurrencyDec 06, 2021 10:20AM ET
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By 2021, proof-of-stake (PoS) anchored itself as the consensus mechanism of choice for new and innovative blockchains. Ethereum 2.0, Cardano, Solana, Polkadot, Terra Luna — five out of the top 10 base layer blockchains run on PoS. It’s easy to see why PoS blockchains are popular: The ability to put tokens to work — verifying transactions and earning a reward in the process — allows investors to earn a passive yield while improving the security of the blockchain network they’d invested in.

While blockchains make incredible progress, the financial products and services available to institutional investors struggle to keep up. Of the 70 crypto exchange-traded products (ETPs) on the market, for example, 24 represent ownership of staking tokens, but only three earn a yield from staking. Not only do ETP-holders miss out on staking yield, but they pay, on average, between 1.8% and 2.3% in management fees.

Henrik Gebbing is co-CEO and co-founder of Finoa, a European digital asset custody and financial services platform for institutional investors and corporations. Prior to founding Finoa, Henrik worked as a consultant at McKinsey & Company, serving financial institutions and high-tech companies across the globe. He started his career with a dual degree in the high-tech branch of Siemens AG (OTC:SIEGY).

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Without staking, institutional crypto investors cannot escape inflation
 

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Comments (1)
Aaron Roberts
Aaron Roberts Dec 06, 2021 4:04PM ET
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Solana isn't Proof of Stake, it's Proof of History. There is a huge difference when it comes to the security of the network.
 
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