TL;DR
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Want another story about institutions and ETH?
Here – have another story about institutions and ETH!
This time, we’re talking about Lido who have just launched ‘Lido Institutional,’ a B2B-focused white glove service targeted at large customers like crypto funds and asset managers who hold ETH.
Who/what is Lido?
Lido is the largest liquid staking platform which means it lets customers lock up their ETH, but also provides them with a special token – stETH – to hold, trade, use as collateral etc. while their ETH earns interest.
(Pretty neat).
According to data from Dune, Lido controls ~28.75% of all staked ETH on Ethereum.
And now they’re taking that dominant position and building on it by creating an offering specifically focused on institutions.
How’s the new offering work?
The main advantage of Lido Institutional seems to be that they’ve figure out a way to avoid the commingling of institutionally-owned stETH with stETH owned by Lido’s retail investors.
With the ETH ETFs being launched, that’s a huge unlock for institutions to get access to ETH, without literally buying ETH.
But the thing about ETH is, while historically its value does go up year-on-year, one of it’s main advantages is all of the other things you can do with it – like staking.
(Meanwhile, the ETH ETFs are not allowed to stake their ETH holdings).
So basically, Lido Institutional is a slightly more sophisticated alternative to the ETH ETFs for hedge funds to get access to ETH – plus it’s more decentralized and it almost certainly will provide a greater return (that’s the whole point of staking).
Pretty smart by Lido to ride the coattails of the explosion of ETH purchases by institutions.
