Crypto staking platform Stader Labs announced Thursday it has closed a $12.5 million private sale led by Three Arrows Capital, valuing the Bangalore, India -based company at $450 million.
- Blockchain.com, Accomplice, GoldenTree Asset Management, Accel and other investors also provided funding.
- Staking is part of the consensus mechanism of proof-of-stake (PoS) protocols. Instead of relying on computers solving arbitrary mathematical problems to validate transactions on the blockchain, as is the case with proof-of-work, PoS randomly selects those that have staked large amounts of crypto to the chain to be validators.
- The more staking that occurs on a chain, the more secure the network is. Those that stake their assets are paid interest, in a similar fashion to a bond.
- Stader is building cross-chain modular middleware that allows users to stake their tokens, and institutions to build applications on top of Stader’s software.
- An example of this could be a digital assets bank offering staking to their customers. The back end would rely on Stader’s infrastructure, similar to how companies rely on Amazon’s AWS cloud services, said Gajjala.
- "The staking market is at $250 billion currently, and will hit $400 billion to $450 billion once Ethereum moves to proof of stake,” Gajjala told CoinDesk in an interview. “It’ll be the largest segment of crypto, just like how the bond market is almost 5x the equity market.”
- Gajjala said that the platform will be compatible with Ethereum when it fully transitions to PoS, which should be around the second quarter of this year. The company picked the Terra and Solana blockchains first because of their mature staking systems.
- Institutional investors are said to be looking at staking as "Internet Bonds," getting both the exposure to the asset class and a familiar structure.
- Stader previously raised $4 million from Pantera, Coinbase Ventures and other investors last year.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.