Liquid Staking Protocol PStake Raises $10M in Strategic Funding

The round included investments from Galaxy Digital, Coinbase Ventures, Kraken Ventures and Alameda Research.

Nov 16, 2021 at 2:00 p.m. UTC

Brandy covers crypto-related venture capital deals for CoinDesk.

PStake, the liquid staking protocol from Indian trade finance company Persistence, has closed a $10 million strategic funding round led by Three Arrows Capital, Galaxy Digital, Sequoia Capital India and Defiance Capital. Other investors in the round included Coinbase Ventures, Tendermint Ventures, Kraken Ventures, Alameda Research, Sino Global Capital, Spartan Group and a number of angel investors.

PStake plans to use the money for talent acquisition and to carry out security audits.

Persistence is based on Cosmos, the so-called “internet of blockchains.” It offers a proof-of-stake (PoS) tech stack that works to expand decentralized finance (DeFi) markets while also attracting institutional investors to the space. Existing Persistence products include decentralized commodities exchange Comdex and staking-as-a-service solution Audit.One. PStake is Persistence’s first in-house application.

“Persistence is decently capitalized already. This was purely a strategic fundraise, which is why we tried to bring on the crème da la crème,” Persistence founder and CEO Tushar Aggarwal told CoinDesk during an interview. He noted that Three Arrows and Defiance Capital are among the largest liquidity providers to protocols, while Sequoia Capital offers the “traditional VC brand name” and bolsters its hiring efforts.

“Tushar and the team behind pStake are dedicated builders in Web 3 that are growing the utility of the Cosmos ecosystem. The Sequoia India team is excited to support them as they build out a roadmap that will bring new utility and further composability to staked assets,” said Sequoia India Managing Director Shailesh Lakhani in the press release.

How it works

Staking in this context refers to using cryptocurrency coins to take part in the consensus of a PoS chain, which provides yield but locks up those coins. PStake gives users a token to represent their staked funds, unlocking the ability to use the tokens for loan collateral or earning interest in DeFi protocols.

PStake wraps a customer’s native tokens into pTOKENS to allow PoS assets into Ethereum’s proof-of-work (PoW) ecosystem. The pTOKENS are pegged to ERC-20, the token that’s considered the technical standard for token implementation on the Ethereum blockchain. Other ERC-20 pegged currencies include Maker and Augur.

Customers can claim staking rewards at any point in the form of pTOKENS, which can be staked again to compound the rewards, or cashed out in the equivalent amount of the native PoS tokens.

What’s next

The PStake application went live in July. Last month, Persistence partnered with BridgeTower Capital to enable institutional players to integrate PStake into their staking operations. The near-term roadmap remains ambitious.

“Asset expansion, DeFi integrations and then asset issuance on the native Cosmos chain for the Tendermint [protocol]-based assets. Those are the three work streams that we’re working on actively right now over the next three to six months,” Aggarwal told CoinDesk.

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Brandy covers crypto-related venture capital deals for CoinDesk.

Brandy covers crypto-related venture capital deals for CoinDesk.

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