Lido launches liquid crypto staking on institutional Ethereum

Hashnote, a Miami-based technology company focused on institutional investments, has just launched the stETH Fund: a regulated fund that allows for compliant and transparent participation in Ethereum’s liquid staking by leveraging the renowned Lido platform.

Hasnote acts as a gateway between clients who are looking for security in the investment world and a fund manager regulated by the CFTC.

The birth of this particular product reflects the increasingly growing demand from users who want to enter the crypto world, particularly in the liquid staking of Ethereum, without having the necessary skills to face the challenges of decentralized finance.

In the meantime, other investment solutions in Lido and other more complex LSD platforms are also emerging, mainly dedicated to more experienced individuals.

Let’s see all the details below.

Hashnote launches stETH Fund and opens up to investments in liquid staking of Ethereum based on Lido

Yesterday, the on-chain financial technology company Hashnote officially launched the stETH Fund investment product which allows investing in liquid Ethereum staking through a regulated fund that relies on the LSD Lido Finance platform.

The goal of Hashnote is to merge the transparency of the blockchain world with its ability to comply with the requirements of US market supervisory bodies such as CFTC, offering a crypto investment solution primarily to institutional clients.

The Miami technology company has noticed how liquid staking on Ethereum has been growing steadily for several months, able to incorporate about 24% of the total ETH supply on the market, and has decided to strongly focus in this direction with a regulated fund.

stETH Fund is built on the decentralized liquid staking middleware open-source Lido, which represents the undisputed leader in this niche sector.

For investors who rely on this product, there are multiple advantages:

• Reliability: the product has been designed to meet the highest standards required by institutional investors;
• Compliance: Hasnote is regulated by the Commodity Futures Trading Commission (CFTC) as a CPO and its funds are registered with the Cayman Islands Monetary Authority (CIMA) as mutual funds. Furthermore, the offered structure is compliant in terms of KYC/AML, providing a compliance front also for the verification of the participants’ identity;
• Safety: Hashnote Smart Contract Vault is managed by MPC (multi-party computation) wallets and is impervious to cyber attacks. The whitelist of client/wallet addresses is maintained and enforced by the proprietary smart contract of Hashnote. The smart contract code is audited by third parties;
• Maximized earnings: the investment in stETH Fund is characterized by maximizing the yield obtained on Lido. This allows for liquidity while staking Ethereum;
• Easy to use: the reference interface is easy to use, intuitive, and allows effortless monitoring.

Among the other features of the regulated fund of Hashnote that invests in liquid Ethereum staking supported by Lido, we see the possibility of a T+0 refund, made possible by the breadth of the portfolio managed by the provider and a redemption with zero slippage in the unstaking process.

In addition, stETH Fund does not have any financial leverage, making it a less risky product compared to other similar derivatives.

Finally, we must mention the minimal risk of the DeFi protocol Lido, the automation of compounding rewards, the diversification of node operators staking on Ethereum, and a smooth and efficient operation.

The state of the crypto LSD market on Ethereum: increasingly innovative investment options

Since the “Shapella” update went live on Ethereum, opening up the possibility for chain users to unstake previously locked ETH, liquid staking platforms like Lido have started to see increasingly growing numbers.

Currently, all LSD applications hold a total of over 12.03 million ETH locked on the beacon chain, corresponding to approximately 26.827 billion dollars.

This data corresponds to almost 42% of all Ether staked in Ethereum 2.0 contracts.

Lido in particular is the undisputed leader in liquid staking and accounts for about 76% of this market niche, in addition to holding the record for the DeFi protocol with the highest TVL of 20.37 billion dollars.

Following are names that boast a significant percentage of ETH in this context, such as, for example, RocketPool (8.77%), Binance Staked ETH (6.46%), Frax Ether (2.56%), Coinbase Wrapped Staked ETH (1.62%), Mantle Staked ETH (1.26%), and StakeWise (0.79%).

The success of this type of platforms is due to several reasons.

First of all, liquid staking offers a convenient solution for those who intend to hold ETH but also want to simultaneously earn a yield and use parallel liquidity for crypto exchanges. 

Secondly, the ways in which the liquid tokens of these protocols, such as stETH, wstETH, frxETH, and many others, are integrating with other DeFi dapps offer significant advantages to stakers who can sometimes benefit from double yield.

Finally, there is also a “convenience” speech since many LSD projects have announced or hinted that they will reward their users who have used Ethereum’s liquid staking with an airdrop.

In this regard, a few weeks ago the layer-2 Blast, which integrates the “native yield” formula and relies on Lido and MakerDAO, reached a TVL of over 920 million dollars, demonstrating all the interest in this sector.

There are also many other smaller platforms that have still managed to cover a good percentage of all the ether locked in LSDs: among these we find EigenLayer, Swell, Kelp, Morpho, Diva Staking, EtherFi, Mev Staking and many others.

The Twitter user “Olimpio Crypto” has created a collection of all these dapps that still do not have a native token and will probably launch it through an airdrop.