• With proof of stake becoming the norm for blockchains, other staking mechanisms for digital assets projects are likely to become the norm.
  • Minimum investment amount of $25,000 with a 12-month lockup period

Accredited investors looking to stake the next generation of Ethereum without going through the technical hassle of opening up a staking operation can now buy into Staked’s ETH Trust. 

A new ETH Trust from Staked gives investors both exposure to the market momentum of ether as well as the staking rewards from being an early validator of the ETH 2.0 network. Stake pays out the rewards in a scheme similar to interest on a bond at a rate of roughly 8% annually. 

As the ETH network transitions from proof of work, where miners are the stakeholders, to proof of stake, where that responsibility moves to large token holders, the process requires a distributed legion of stakers to commit to holding ETH 2.0 tokens in order to ensure a smooth transformation. 

Learn more about the smart contract platforms challenging Ethereum: sign up for our upcoming webinar on April 1, 2021 at 12:00 PM ET.

But setting up a staking operation on your own is a technically challenging task that requires familiarity with running nodes. Instead, providers like Staked have stepped in to fill this gap while also filling the void for bond-like vehicles that have exposure to the digital asset market. 

“We’ve seen very strong early interest, primarily from crypto-savvy funds and high net worth individuals. I expect true institutional conversations will take longer,” Tim Ogilvie from Staked told Blockworks. 

Initially, ETH 2.0’s staking requirements had been criticized for not being overly attractive to retail investors in the era of double digit DeFi returns. However, the product found a niche with institutional investors looking for “Internet Bonds”. As Blockworks has previously reported ETH 2.0 staking infrastructure providers have had considerable interest from a gamut of institutional investors. At the same time, ether has become something of a scarce commodity on exchanges as whales — like institutional ETH 2.0 stakers — and the Grayscale Ethereum trust double down. 

The minimum investment is $25,000 with a 12-month lock-up period. Exact details of a redemption process have yet to be determined. 

With proof of stake becoming the norm for blockchains, other staking mechanisms for digital assets projects are likely to become the norm. Ogilvie said that his company had been approached about doing a similar structure for other tokens by a number of investors, and is open to doing so once they ensure that all the kinks in the system have been worked out.

Ether is currently trading at $1,840 and is up 4% in the last 24 hours according to CoinGecko. 

  • Blockworks
    Sam Reynolds is a Taipei-based reporter, covering digital assets and regulation throughout Asia. Before joining Blockworks he was an editor at Forkast News and an analyst with IDC.