Coinbase and crypto staking firm Figment are supporting the development of a new liquid staking protocol aimed at institutional investors.
Coinbase Cloud and Figment will serve as validators on the new Alluvial protocol, according to separate statements from Alluvial and Coinbase shared with The Block on Tuesday.
Alluvial is being developed by a team led by three founders: Matt Leisinger, former head of liquid staking products at Figment; Nicolas Maurice, the former CTO of staking platform Kiln; and Mike Taormina, former head of institutional business at the Index Cooperative DAO.
The startup’s pitch is that current liquid staking protocols do not cater to the needs of institutional investors. “What the space needs is an opportunity for enterprises and institutions to leverage composable liquidity while remaining aligned with their compliance requirements,” Leisinger told The Block.
“By working with trusted integrators who understand compliance and execute KYC / AML checks, Alluvial will be able to build seamless on-ramps into the protocol that make it easy for institutions to stake their assets,” Leisinger added.
Mara Schmiedt, senior manager of Coinbase Cloud at Coinbase, concurred. Institutional investors, she said, “need to know their counterparties and enterprise-grade security is top of mind.”
Alluvial will initially support staking on Ethereum and has a plan of multichain support in the future, said Leisinger. The protocol is expected to launch sometime later this year.
Leisinger did not comment on whether Alluvial has raised any funds and whether Coinbase and Figment are investors in the project.
Crypto staking has grown popular over the last year, including liquid staking. Liquid staking allows investors to earn the original staking reward and also use the same capital to earn additional yield via decentralized finance platforms.
Lido, the current market-leading liquid staking protocol, has nearly $9 billion worth of assets locked by its customers, according to data from DeFi Llama.
As The Block reported recently, traditional staking platforms, including Figment and Blockdaemon, are also working on launching liquid staking services for institutional clients.
As for long-term plans for Alluvial, it intends to convert into a decentralized autonomous organization (DAO) and hand over governance to its community, said Leisinger.
© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.