Daily Recap

Wednesday, July 7th, 2021

Jul 08, 2021

A recent JPMorgan report estimates the crypto staking business is worth $9 billion and could reach $40 billion by 2025, if proof-of-stake becomes the dominant blockchain consensus mechanism.

trib.alJPMorgan Says Ethereum Upgrades Could Jumpstart $40 Billion Staking IndustryA recent JPMorgan report estimates the crypto staking business is worth $9 billion and could reach $40 billion by 2025, if proof-of-stake becomes the dominant blockchain consensus mechanism.

Ethereum is moving from Proof of Work (mining) to Proof of Stake (staking). While the transition may take some time, staking is already becoming a massive industry in and of itself.

Currently those securing the Ethereum network via mining are rewarded in ETH. Once we transition to Proof of Stake, these miners will have to start staking or look for something else to mine.

PoS is an entirely different mechanism. PoS rewards “validators” - or those securing the network by locking up a minimum of 32 ETH - with interest.

While having 32 ETH wasn’t an unattainable benchmark only a year ago, today it would require a $71,000 investment on your part.

Most people don’t have $71k. So…wat do?

Enter liquid staking protocols.

If you don’t have 32 ETH, you don’t need to worry. There are protocols like Lido that allow you to deposit any amount of ETH into a “pool” with others. Lido handles the technical aspects of staking on your behalf.

When you deposit ETH onto Lido, you’re given stETH in return. stETH (staked ETH), is essentially interest-bearing ETH. Liquid staking protocols like Lido have advantages that acting as a validator does not.

If you lock up your 32 ETH as a validator, the positive is that you’re helping ensure the decentralization of the network. Yay. The downside is that you’re earning interest on your ETH, but you’re unable to use it as it’s locked up indefinitely.

With liquid staking protocols, you are given a replacement token (stETH or similar) that can be used in DeFi. Currently, Lido currently has 598,000 ETH locked up on their platform. That is approx. $1.9 billion. This is just one platform, and we are still many months away from the actual shift to Proof of Stake. Staking being a $40 billion industry is not so ludicrous.

Swiss bank Sygnum offers Ethereum 2.0 Staking

While I would not personally stake my Ethereum with a fully centralized company, especially a bank, it is interesting that a Swiss bank sees the value in offering staking services to clients.

Goldman says ETH could dethrone BTC as the ultimate SOV (store of value)

They also say that cryptocurrencies aren’t yet viable investments, despite reopening their crypto trading desk in May and expanding that trading desk to include Ethereum in June 🤔

CoinDesk @CoinDesk

.@GoldmanSachs says ether could unseat bitcoin as the dominant store of value crypto, while maintaining its stance that cryptocurrencies aren't yet viable investments. @Sebsinclair1989 reports.

trib.alEther Could Overtake Bitcoin as Store of Value, Goldman Sachs Says - CoinDeskWhile bullish on ether, Goldman denied cryptos’ superiority to gold when it came to taking the top spot among safe-haven assets.

Ethereans who understand the upcoming “triple halving” are actually expecting a “flippening” (Ethereum could surpass Bitcoin and become the largest cryptocurrency by market cap). Institutions are starting to catch on.