TL; DR
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Here – another story about institutions and ETH!
This time we’re talking about Lido who just launched ‘Lido Institutional’, a B2B-oriented service aimed at large clients such as crypto funds and asset managers that hold ETH.
Who/what is Lido?
Lido is the largest liquid stake platform, meaning customers can lock up their ETH, but they are also given a special token – sETH – to hold, trade, use as collateral, etc., while their ETH earns interest.
(Pretty neat).
According to data from DuneLido controls ~28.75% of all ETH on Ethereum.
And now they are taking that dominant position and building on it by creating an offering specifically aimed at institutions.
How does the new offer work?
Lido Institutional’s main advantage seems to be that they have found a way to prevent the mixing of institutionally owned sETH with sETH from retail investors in Lido.
Now that the ETH ETFs are launching, that’s a huge unlock for institutions to access ETH, without literally buying ETH.
But the thing about ETH is, although historically speaking, its value do increasing year after year, one of the main benefits is all the other things you can do with it, like staking.
(Meanwhile, the ETH ETFs are not allowed to stake their ETH holdings).
So basically, Lido Institutional is a slightly more advanced alternative to the ETH ETFs for hedge funds to access ETH – plus it’s more decentralized and it will almost certainly deliver greater returns (which is the whole point of staking).
Quite smart of Lido to ride on the explosion of ETH purchases by institutions.