Swiss bank Sygnum is officially the world’s first digital asset bank to offer Ethereum 2.0 staking as a service. The bank will stake its clients Ethereum (ETH) to generate up to seven percent yield per annum.
Sygnum and regulatory body, the Swiss Financial Market Supervisory Authority (FINMA), can now offer clients Ethereum staking services on their institutional-grade platform via a simple user-friendly setup:
With Ethereum powering the exponential growth of decentralised finance (DeFi) applications, staking is a compelling choice for long-term Ethereum investors also seeking attractive yields.
Sygnum
Sygnum already offers staking for the Tezos blockchain, as well as yield generation for its Digital Swiss Franc stablecoin (DCHF). However, the bank has various exchanges and pools to compete with. This offer is one for those who don’t want to get down and dirty with buying crypto and the perceived intricacy of moving it to a staking pool.
Higher Yields than Traditional Interest Rates
With interest rates of savings accounts in the US barely breaking one percent, and some of the best in Australia nearing three percent, the offer is “a digital asset alternative for yield generation in today’s low or negative interest rate environment”.
Bankrate, one of the leading providers of rates and financial information, shows that its top-rated online high interest account returns 0.57% APY.
And when considering real interest rates (bank lending rate minus inflation) in developed countries, most of them are sitting under 4%, with Australia’s at 1.65% in 2019.
With the US currently sitting at a negative real interest rate, people are looking for places to keep their money where it won’t be eaten away by inflation and decreasing interest rates.
Staking as a Long Term-Investment
Staking involves the locking up of assets to participate in the validation of transactions on proof-of-stake blockchains, with a financial ‘reward’ provided in exchange.
Sygnum
By staking Ethereum, investors hold an asset that has had a year-to-date growth (YTD) of 220 percent. So not only can the asset grow in value, but one also receives a percentage growth of the asset itself as a reward for contributing to the consensus process.
Sygnum clients can participate in the new proof-of-stake Ethereum and benefit from potentially higher staking rewards now. This is a compelling choice for long-term investors in the Ethereum ecosystem.
Thomas Brunner, head of accounts and custody, Sygnum
Most recently the number hit 6.1 million Ethereum being staked, with more than 185,000 validators. The amount of ETH being staked equates to over US$14 billion in Ethereum.
The digital asset bank is also looking to support DeFi assets, launching regulated banking services for eight leading tokens including Uniswap (UNI), Maker (MKR), and Curve DAO Token (CRV).
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