Nearly 70% of institutional investors commit to Ethereum staking – survey

Nearly 70% of institutional investors holding Ethereum (ETH) are engaged in staking, with 52.6% of them holding liquid staking tokens (LSTs), according to a Blockworks Research report.

Nearly half of institutional investors staking ETH prefer to use only one integrated platform, such as Coinbase and Binance. Meanwhile, 60.6% of the survey participants also utilize third-party staking platforms.

According to the report, one out of five institutional investors surveyed had over 60% of their portfolio allocated to Ethereum or an ETH-based LST. The survey included exchanges, custodians, investment firms, asset managers, wallet providers, and banks.

The report revealed that the key traits taken into consideration by respondents when choosing a staking provider were reputation, range of networks supported, price, simple onboarding, competitive costs, and expertise and scalability.

Liquidity and security were also deemed the most important features for institutional investors when deciding whether staking is a viable option. On a scale from 1 to 10, liquidity scored an average importance of 8.5, reflecting concerns about exiting large LST positions if necessary.

Meanwhile, security scored even higher, with an average importance rating of 9.4, driven by worries over withdrawal efficiency in volatile market conditions. Additionally, 61.1% of respondents indicated they would be willing to pay a premium for enhanced security and fault tolerance.

Geographic location also plays a role, with half of institutional investors considering a validator’s location important when choosing a staking platform.

Rise of liquid staking

The report also highlighted that the rise of third-party staking platforms is driven by the increasing popularity of LSTs. These tokens address the initial issues with ETH staking when users lose their liquidity by locking it to help with network security.

Furthermore, due to their popularity, various DeFi applications have started integrating LST in their…