Lido is unveiling a specialized staking service known as Lido Institutional, which is tailored towards serving large institutional clients such as cryptocurrency funds and asset managers who hold ETH. While institutions currently have the ability to stake ETH on their own, Lido Institutional aims to address the concerns around anti-money laundering and know-your-customer regulations that institutional clients often face. By utilizing this white-glove service, institutions can stake and mint new stETH without any transaction history, thus preventing the blending of institutionally-owned stETH with stETH held by Lido’s retail users.
As the leading liquid staking platform, Lido already controls a significant portion of all staked ETH on Ethereum, representing approximately 28.75% according to Dune data. Lido Institutional is part of the platform’s ongoing efforts to foster wider adoption of stETH by establishing an ecosystem that includes qualified custodians, MPC wallets, and various technology partners.
One collaboration that Lido has formed is with Fireblocks, enabling institutional clients to select Lido as their staking provider for their ETH holdings. By doing so, institutional clients can integrate their institutionally-minted stETH collateral into centralized exchanges like Deribit, enabling the use of stETH for settlement purposes. Lido’s Institutional Relations Lead, Kean Gilbert, explained that approximately 25% of Lido’s Total Value Locked (TVL) currently comes from institutional players, and their aim is to attract an additional 25% through dedicated institutional services.
Additionally, Lido’s institutional offering presents a competitive alternative to recently launched ether exchange-traded funds (ETFs) that lack a staking component. By utilizing Lido Institutional, clients can benefit from capturing the full 3-4% yield of Ethereum Beacon Chain rewards. Laser Digital, a digital asset subsidiary of Nomura, is also planning to launch an ETH ETF alternative that would distribute Beacon Chain rewards to stakers.
Lido’s approach to supporting institutional staking goals is more decentralized, as its operator group consists of multiple independent entities. This decentralized structure ensures greater reliability and support for institutions, as opposed to relying on anonymous contributors through platforms like Discord.