MetaMask Wants To Streamline Institutional Staking

MetaMask Institutional is launching a marketplace to streamline staking for companies.

The marketplace, a bridge between institutions that are interested in staking and providers of staking, will go live on March 27. Initial partners on the marketplace include Allnodes, Blockdaemon and Kiln.

Following the Merge, which moved the Ethereum network from proof-of-work to proof-of-stake last year, institutions have shown greater interest in staking, MetaMask institutional product lead Johann Bornman told Blockworks.

“We’ve observed a real shift in interests from institutions into staking, particularly over the last six months,” Bornman told Blockworks. “With the important fork upgrade that’s happening with Shanghai and Capella, I think these are two very key landmark moments that are driving more institutional interest.”

Sharing Bornman’s sentiment, Tim Ogilvie, CEO of Staked, a non-custodial staking platform acquired by Kraken in December 2021, also notes that the upcoming Ethereum upgrade on April 12 is likely going to usher in more institutional investors into the staking space.

“You’re going to see a lot of people coming in and staking, so the net of that will drive a lot of long-term staking demand,” Ogilvie said.

So why a marketplace?

Bornman tells Blockworks that existing institutions are bound to providers selected by their custodians, and this latest marketplace aims at providing companies with more choices for their staking provider.

It also plans to standardize reporting, he said.

“What we want to do is make it very easy for institutions to not to just take but also understand the rewards they’re receiving, what they are, what they look like across different time horizons,” he said.

MetaMask’s institutional staking marketplace could be a good first step in offering a simplified staking solution to institutional players, Blockworks Research analyst Ren Yu Kong said. 

“I expect to see further integrated service offerings through MetaMask Institutional as the space grows so that the full range of an institution’s needs are fulfilled within one platform,” Kong said.

What are institutions staking?

Different institutions have different reasons to participate in staking.

For decentralized hedge funds — or crowd-sourced hedge funds — many of its staking initiatives are focused on liquid staking derivatives (LSDs) Bornman said.

In the case of Staked, many of its institutional clients include large venture funds, such as Pantera and Multicoin, asset managers such as Brevan Howard who are often running a fund strategy, and Wealthsimple, which runs different accounts for broader sets of individuals. 

“Venture funds are making early investments in promising Layer-1’s that use staking as a security layer, and in those cases, they are looking to support a nascent investment,” Ogilvie said. “Asset managers [might] put assets into Ethereum because [they] have conviction around the story there.”

Ogilvie is optimistic that staking will eventually replace bonds as a large allocation in institutional portfolios.

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