Foundry Digital Launches Staking Business as Institutions Become Comfortable

Digital Currency Group subsidiary expands services to make proof-of-stake networks more accessible to institutions.

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Source: Blockworks

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key takeaways

  • Foundry has been staking parent company Digital Currency Group’s assets for more than a year in preparation for the launch
  • Staking will be “a must-offer service” for exchanges, wallet providers, banks and custodians, according to Foundry’s vice president of product development

Digital Currency Group affiliate Foundry Digital is launching a staking business and other services designed for exchanges, banks and other institutions, it announced Wednesday. 

The new business, Foundry Staking, has a range of services covering 20 blockchain networks including Solana, Helium, The Graph, and Horizen, the company said on Wednesday.

Founded in 2019 and based in Rochester, New York, Foundry has operated mainly in proof-of-work networks such as Bitcoin. Proof-of-stake (PoS) is the process of allowing participants to lock in their tokens for a certain amount of time to become eligible to generate the next block in the blockchain and receive staking rewards. 

PoS systems are also very important to its mission of decentralizing infrastructure, Joe Hoffend, vice president of product development at Foundry said.

Foundry has been staking Digital Currency Group’s assets for more than a year and has built up the necessary infrastructure and expertise to confidently offer the services to institutions, Hoffend told Blockworks. 

“We are also seeing institutions becoming more comfortable in how they think about offering staking services to their customers or staking their own digital assets as part of more sophisticated portfolio strategy,” he said. “And we know we can be a trusted resource for those looking to get involved,” Hoffend added.  

Foundry is entering the staking space as PoS protocols have seen massive growth.  

Staked reported last month that the market capitalization of the top 30 PoS protocols totaled $594 billion as of September 30, representing a 65% increase from the second quarter.

Konstantin Richter, founder and CEO of blockchain infrastructure platform Blockdaemon, said last month that he predicts the market size of crypto to expand three to four times due to the evolution around liquid staking, lending and decentralized finance (DeFi). He added that he expects the full merge of Ethereum 2.0, which is transitioning from proof-of-work to PoS, to happen during the first quarter of 2022. 

“For any institution holding client funds, such as exchanges — both traditional finance and crypto-native — wallet providers, banks, and custodians, [staking is] going to be a must-offer service soon, if not already,” Hoffend said. “With venture capital firms and hedge funds, it’s a way to earn rewards on the assets they already hold,” he added. 

Foundry will work with digital asset prime brokerage Genesis, another Digital Currency Group subsidiary, to provide its clients with high-security custody, insight for treasury management, staking strategies and portfolio diversification.

“We will continue adding new staking protocols over time,” Hoofend said, “as well as several adjacent offerings that make sense for both our proof-of-work and proof-of-stake customers.”

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