Institutional investors have shown significant support for Ethereum staking, with nearly 70% of them actively participating in staking activities, as per a recent Blockworks Research report. Among these investors, over half prefer using liquid staking tokens (LSTs), with many opting for integrated platforms like Coinbase and Binance.
The report also highlighted that reputation, security, and liquidity were the top considerations for institutional investors when selecting staking platforms. In fact, factors such as range of networks supported, competitive costs, and expertise and scalability were also crucial for decision-making.
Liquidity and security emerged as the most important features for investors, with liquidity scoring an average importance rating of 8.5 and security scoring even higher at 9.4. Concerns about exiting large LST positions and withdrawal efficiency in volatile market conditions were key drivers behind these ratings.
Geographic location also played a role in investor decision-making, with many considering a validator’s location important when choosing a staking platform. The rise of liquid staking tokens has further fueled the popularity of third-party staking platforms, with tokens like stETH from Lido Protocol gaining significant traction among institutional investors.
However, concerns about centralizing validation power in a few protocols have been raised by a majority of respondents. Restaking, a new trend that allows validators to use staked ETH across multiple protocols to earn additional yield, has also garnered interest from investors despite associated risks like slashing and centralization of validators.
Despite these risks, a large percentage of institutional investors remain optimistic about the potential of restaking and distributed validator services. This positive outlook indicates a growing interest in staking ETH among institutional players, showcasing a strong show of support for Ethereum in the staking space.