The firm aims to build a tokenized staking marketplace for institutional investors to improve yield performance in their funds
COPENHAGEN, Denmark, April 17, 2024 /PRNewswire/ -- Northstake, a regulated custodial virtual asset service provider offering compliant staking products for institutions, has announced the launch of a tokenized ETH staking pilot on the Ethereum testnet, Holesky. The pilot is conducted in collaboration with leading digital asset manager 3iQ, a Canadian investment fund manager, alongside CoinFund and CoinDesk Indices, contributing CESR, the composite ether staking rate. Industry-leading liquidity providers are currently onboarding with Northstake and will be announced shortly.
Northstake demonstrates the capability of tokenized staking to allow regulated institutions to liquidate their Ethereum validator nodes within hours instead of days, while satisfying regulators' requirements. Northstake envisions a frictionless marketplace for tokenized Web3 infrastructure and expects the Holesky testnet launch to pave the way for a Mainnet launch later this year.
Pascal St-Jean, President of 3iQ, stated, "We are happy to be an early testing partner with Northstake on tokenized ETH staking. Our goal is to significantly improve the capital efficiency of our ETH funds in a regulatory-compliant manner."
Institutional interest in Ethereum staking and other digital assets has been steadily increasing over the past few years, with 68% of investors indicating intentions to start staking or increase their staked amounts following the Shanghai upgrade. As of April 2024, more than $109 billion worth of ETH has been staked on the chain, with institutional investors among the largest cohorts of participants. Northstake's pilot with 3iQ caters to a specific demand from institutional investors for the rapid liquidation of staked Ether in compliance with regulatory requirements.
Jesper Johansen, Founder and CEO of Northstake, said, "We are looking forward to supporting 3iQ on several initiatives from our stronghold in Europe. In the short term, tokenized staking aims to improve capital efficiency in staking funds by increasing the assets they are allowed to stake. In the long run, tokenized staking opens up unprecedented opportunities for institutions to join a fully regulated marketplace for Web3 infrastructure."
Northstake intends to leverage CoinDesk's standardized USD-denominated reference rate for spot Ether and the Composite Ether Staking Rate to ensure transparent settlement prices between buyers and sellers.
Alan Campbell, President of CoinDesk Indices, commented, "CESR, which the marketplace has adopted for benchmarking, OTC derivatives, and research, is ready to enhance stability and risk management in staking products like those offered by Northstake."
CoinFund, a Web3 and cryptonative investment firm and registered investment adviser, recognizes the regulatory considerations that exist for fund managers when engaging in staking. Chris Perkins, President of CoinFund, remarked, "We are excited about tokenized staking as one of the pathways to regulatory-compliant staking for exchange-traded funds like 3iQ and other financial institutions. This is facilitated by having an institutional reference rate for the crypto asset class, like CESR."
As a next step, Northstake is in talks with digital asset ETF providers and liquidity providers, and is onboarding new partners to expand its offerings and customer base. Additionally, Northstake is actively negotiating the distribution of tokenized staking solutions with leading digital asset custodians.
Since beginning operations in 2021, Northstake has experienced remarkable growth. Having raised $3M in funding in 2023, the company has since announced collaborations with Fireblocks, Chainalysis, NEAR Protocol, Flare Network, and Polygon. Coupled with its expanding network presence and strong financial backing, the company is well-positioned for further growth and success.
Jesper Johansen, CEO & Founder of Northstake is available for interviews.
About Northstake A/S
Northstake A/S is a regulated, custodial, virtual asset service provider offering compliant staking products for institutions. Northstake offers a variety of investment vehicles including single, multi-asset, thematic staking, and yield-generating products in addition to a suite of OTC and algorithmic trading services. Based in Denmark, Northstake acts as a bridge between traditional finance and the crypto world, simplifying and securing the way institutions invest in crypto. Through its proprietary multi-chain crypto staking platform, it carves out accessible pathways for investors to build yield-generating crypto products, giving investors the opportunity to be part of building the economies of tomorrow. Northstake A/S (VASP, FTID: 17520) is regulated under the Danish Financial Supervisory Authority (DFSA) and the 5th EU Anti-Money Laundering Directive (AMLD5) and have recently achieve initial approval for its VASP licens under Virtual Asset Regulatory Authority (VARA) in Dubai.
About 3iQ
Founded in 2012, 3iQ is one of the world's leading digital asset investment fund managers, offering investors convenient and familiar investment products to gain exposure to digital assets. 3iQ Corp. was the first Canadian investment fund manager to offer public bitcoin investment funds: The Bitcoin Fund, and the 3iQ Bitcoin ETF, as well as public ether investment funds: The Ether Fund, and the 3iQ Ether Staking ETF. To learn more, visit 3iq.io.
About CoinFund
CoinFund is one of the world's first cryptonative investment firms and a registered investment adviser founded in 2015. The firm champions the leaders of the new internet, powered by foresight as active investors to achieve extraordinary outcomes. CoinFund invests in seed, venture, and liquid opportunities within the blockchain sector with a focus on digital assets, decentralization technologies, and key enabling infrastructure. For more information, visit CoinFund.io, LinkedIn or join us on X.
About CoinDesk Indices
CoinDesk Indices has led the digital asset revolution, empowering global investors since 2014. Our indices are the cornerstone of the largest digital asset products worldwide. Precision-driven and compliant, indices like the CoinDesk 20 set the standard for measuring, trading, and investing in crypto. Over $30B in assets are benchmarked to CoinDesk Indices' products. CoinDesk Indices' trend signals empower smart beta and alpha-seeking strategies. Ready to achieve your digital asset goals? Visit coindeskmarkets.com for more.
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