Kraken joins consortium to build enterprise-grade liquid staking protocol

Quick Take

  • Crypto exchange Kraken has joined an independent industry consortium to build, secure and support an enterprise-grade liquid staking protocol, according to the operating company supporting its development, Alluvial.
  • Alluvial announced the protocol will be known as Liquid Collective, with Kraken joining a growing list of participants including Coinbase Cloud, BENQI, Rome Blockchain Labs and Acala Foundation.

Liquid staking startup Alluvial has added the cryptocurrency exchange platform Kraken to its independent industry consortium, announcing it will be known as Liquid Collective.

Kraken joins a growing list of industry participants — such as Kiln, BENQI, Rome Blockchain Labs and Acala Foundation — helping to build, secure and support the enterprise-grade, multi-chain liquid staking protocol. The aim is to establish an industry standard, enabling trading venues and custodians to offer liquid staking to institutional customers with robust KYC/AML, monitoring and reporting.

“Liquid staking grew from 1% to around 30% of the Ethereum staking market segment just this year alone. Demand is growing rapidly and institutional interest is emerging,” said Tim Ogilvie, product director at Kraken. “There is a need for standardization and, as a result, an opportunity for Kraken to help build the most secure enterprise-grade liquid staking standard.”

“Proof-of-stake blockchains make up more than half of the entire crypto market cap, yet, there hasn’t been a viable option for token holders to participate in liquid staking,” said Matt Leisinger, CEO and co-founder of Alluvial. “With the upcoming launch of Liquid Collective, token holders will gain seamless access to enterprise-grade liquid staking. This effort can only be accomplished through true collaboration across the ecosystem. We're proud to be working with some of the best teams in web3 to launch Liquid Collective."

Liquid staking has become a popular alternative to traditional staking, where users lock up their tokens on proof-of-stake blockchains to contribute to their security and earn rewards. Liquid staking also provides users with a derivative crypto token, representing the equivalent amount of an underlying staked asset, such as stETH, Lido’s liquid variant of staked ETH. 

Rather than staking tokens that can have lengthy unlocking periods, liquid staking offers stakers greater liquidity, enabling them to transfer and use the derivative crypto tokens to generate additional yield in other DeFi protocols. These tokens will be known as LsETH on the Liquid Collective protocol.

The news represents Kraken’s latest move into liquid staking services, after having acquired the non-custodial staking platform Staked in December 2021. Staked will also join as a validator on Liquid Collective, alongside Coinbase Cloud and Figment.

Editor's Note: This story has been updated to include Rome Blockchain Labs' participation in the protocol. 

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