DeFi exec breaks down what it takes to attract institutions to staking

In episode 18 of Cointelegraph’s Hashing It Out podcast, Elisha Owusu Akyaw sits down with Matt Leisinger, chief product officer at Alluvial — a software development company supporting the implementation of the Liquid Collective protocol — to explore the world of crypto staking and its potential to attract institutional investors. Leisinger explains the Liquid Collective and shares his thoughts on the future of Ether (ETH) staking after the Shanghai upgrade. 

Matt Leisinger started his carrier in the traditional finance sector and shifted to trading cryptocurrencies in 2016. Leisinger invested in the Ethereum ecosystem and contributed to projects providing liquid staking services. Leisinger explains liquid staking as allowing users to stake assets on the blockchain and mint a receipt token that represents the staked assets, which maintains liquidity while users earn rewards and secure the network.

As institutional investment in cryptocurrency skyrockets, some are looking at ways to add staking to their portfolio. According to Leisinger, most of these firms would naturally choose liquid staking, but hurdles around Know Your Customer and Anti-Money Laundering requirements, transparency, tokenholder privileges, and counter-party risks must first be dealt with. Leisinger explains that Alluvial provides a solution for enterprises by dealing with these hurdles that slow down adoption.

On regulations, Leisinger says that firms like Alluvial “really want” regulatory clarity. According to him, there are two types of staking: direct staking and actively managed staking. Both have different implications from a regulatory perspective around token ownership, security and transparency. Leisinger believes liquid staking is better positioned to withstand regulatory pressure due to its transparency.

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What’s more, Leisinger admits that a lack of regulatory clarity has had a chilling effect on institutional staking. Nevertheless, the Alluvial exec is optimistic that new milestones like the Ethereum Shapella upgrade will derisk participation in staking and attract interest.

Listen to the latest episode of Hashing It Out with Leisinger on Apple Podcasts, Spotify, Google Podcasts or TuneIn. You can also explore Cointelegraph’s full roster of informative podcasts on the Cointelegraph Podcasts page.