In mid-September, 2022, Ethereum network successfully went on through The Merge upgrade. The highly anticipated upgrade made the transition consensus mechanism of smart contract compatible networks possible. Earlier the network was proof-of-work and post-merge it became proof-of-stakes.
Many other possibilities emerge following the merge, especially after the transition. For instance, several industry experts talk about the possibility of staking yield investors to earn from ether (ETH) making it one among the institutional capital. Regulators and risks related to custody still remain as a threshold though, they argued.
Transition of Ethereum could help the network to reduce the energy consumption with high margin. However, it also matters given the chances of earning additional ether (ETH) as staking rewards. The staking rewards act as a fixed and sustainable income within the crypto space. To a larger extent, it mimics the fixed returns from investments in stocks and commodities markets etc.
Portfolio manager at Digital Asset Alpha Strategy of Vaneck, Pranav Kanade said in comparison to many other similar yield generating regimes, Ether’s offering has a competitive edge. Returns on ether staking could be compared to investment-grade bonds, municipal bonds and even Treasury bills. The frequency for investors to earn the yield in ether is also an advantage, he added.
Chief Investment Officer at Globe 3 Capital, Matt Lason said given the financial institutions getting into the crypto space and adding crypto assets a crucial place in their priority, it becomes likely to get pulled towards such an asset that offers stability, huge in its market size, seems easy to trade and secure at the same time. According to Lason, Etehreum (ETH) fulfills all the crucial requirements.
Fidelity Digital Assets’ research analyst, Jack Neureuter said the portrayal of ether emerged following the merge upgrade is expected to boost the interest of many institutional investors towards the crypto asset.
Source: https://www.thecoinrepublic.com/2022/09/27/institutions-looking-towards-ether-as-potential-fixed-yield/