Ex-Deutsche Telekom Team Launch Liquid Staking Division at Crypto Custodian Finoa

Newly formed Finoa Consensus Services is working with staking specialist StakeWise.

AccessTimeIconMay 24, 2022 at 7:00 a.m. UTC
Updated Apr 9, 2024 at 11:23 p.m. UTC
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Looks like Deutsche Telekom’s (DTEGY) loss is Finoa’s gain.

Six months after departing the European telecoms giant, Andreas Dittrich and Daniel Schrader – two of Deutsche Telekom’s former blockchain team – have helped create a unit at cryptocurrency custody provider Finoa for building infrastructure to support proof-of-stake (PoS) networks.

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  • Finoa, regulated by Germany’s BaFin, will work with PoS specialist StakeWise, the companies announced Monday. The new Finoa Consensus Services subsidiary will offer liquid staking.

    As Ethereum, the second-largest public blockchain, makes its transition from proof-of-work (PoW) mining to PoS, participants running transaction validator nodes are required to lock up ether (ETH) tokens on the network, for which staking yield can be earned over time. Offering participants a way to have their cake and eat it, liquid staking platforms provide users with IOU tokens representing assets bound to a network for staking and validation purposes, unlocking the ability to use those liquid tokens in decentralized finance (DeFi) protocols, for instance.

    Finoa has offered in-custody staking for several years. It will run validators on the Ethereum network and become a StakeWise operator for both Gnosis and Ethereum, explained Dittrich, managing director of the new division.

    “In our opinion, liquid staking will be on every single PoS network out there within a year or two,” Dittrich said in an interview. “Right now, this might be a new thing, but it will be abundant and very normal in the future. You can’t do without liquid staking.”

    There’s a well-trodden path that leads innovators away from bureaucratic enterprises to nimble startups, a steady stream that flows from banks and blue-chip companies to crypto-native firms.

    “It was great working for Deutsche Telekom, with this awesome power behind you and being able to steer it once in a while,” Dittrich said. “But really, the speed at which you can move stuff in a company like Finoa is enormous and it’s fully crypto-native.”

    Still, the recent collapse of Terra’s UST stablecoin and its related LUNA, might influence regulators’ and the public’s perceptions of complex mechanisms used to earn yield from next-generation blockchains.

    “We expect regulation will come to this space. Maybe the pure infrastructure part of staking might remain like a technical or IT service,” he said. “But if you are talking liquid staking that’s pretty close to becoming a financial service. We need to be ready for our institutional clients who want to actively support proof of stake networks but also want to do more with their assets. So we are preparing the crypto space for future regulation.”


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    Ian Allison

    Ian Allison is an award-winning senior reporter at CoinDesk. He holds ETH.

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