Staking as a Service: Beyond Asset Custodianship

By Zaki Manian and Kristi Põldsam

The emergence of Staking-as-a-Service providers is one of the rising trends in the blockchain industry. This is a trend that has been talked about since 2017 and it is incredibly satisfying to see it beginning to blossom.

There is a strong demand for such service by hedge funds, VC’s and other entities holding large amounts of illiquid tokens. Those tokens can be used to support securing the network and to generate additional returns. However, setting up and managing a secure and reliable validator node is not and should not be in the core competence of money managers. Node mismanagement and faulty behavior, be it intentional or not, can result in slashings by the protocol with penalties far outweighing the transaction fees and block rewards that can be earned. The responsibility for maintaining validator network infrastructures should be left to...