The cryptocurrency storage company, Anchorage Digital, announced that it is launching an Ethereum-based staking service aimed at institutions. Venture capital firms, banks, and even governments will be able to earn rewards through staking on the Ethereum network.
Diogo Mónica, co-founder and president of Anchorage Digital, stated that the company is “providing heightened legitimacy to market-tested assets—and in the process, eliminating any hot wallet risks for institutions looking to generate new earnings from crypto”.
This means that Anchorage Digital will be keeping the institutions’ funds in cold storage. In other words, the funds will be kept offline, as opposed to being stored in online, “hot” wallets.
Currently, Ethereum is in the process of becoming a fully proof-of-stake blockchain. The proof-of-stake consensus mechanism allows users to stake their crypto in order to validate the blockchain. This is a much less energy-intensive process than the one associated with the proof-of-work mechanism, used by Bitcoin. In return, validators earn the platform’s native crypto (in this case, ETH).
Anchorage Digital previously made the news in 2021. The company then became the first digital asset bank in the U.S. to receive a federal bank charter.