On June 12, staked Ether on the Beacon Chain hit an all-time high of 34.7 million. This incredible milestone is based on data that has been aggregated and collected by Beaconcha.in. This milestone further underscores the developing institutional interest in Ethereum staking, especially as more regulated custody solutions start to become widely available.

It’s a problem because demand for staked ETH is surging. Institutions in Dubai, United Arab Emirates, and Jersey are already getting access to custody solutions purpose-built for this asset. Custody solutions are an important consideration for institutions like asset managers and family offices. They guide these organizations through complex compliance requirements and ensure that risks are effectively managed.

Komainu, a regulated digital asset custody provider, started providing custody support for Lido Staked ETH (stETH) on May 27. We applaud this move as it addresses a major barrier for institutions interested in engaging with staked ETH.

"Historically, the limited availability of regulated custodians or MPC wallet providers supporting stETH was a significant barrier for these institutions." - Kean Gilbert

Custody solutions are increasingly important for institutions that need to ensure their digital assets are stored securely and in compliance with relevant laws. The crypto-native firms, unsurprisingly, prefer to keep control of their crypto assets themselves. They avoid third-party custody as it relates to staked ETH.

"Many asset managers, custodians, family offices and crypto-native investment firms are actively exploring staking strategies." - Kean Gilbert

This surge in staked ETH is happening at the same time as all eyes are on the United States and speculation over Ethereum staking ETFs. US exchange-traded fund issuers are working on these products and waiting for regulatory clarity before rolling them out.

"Institutions find liquid staking tokens like stETH useful because they directly address challenges related to capital lock-ups and complex custody arrangements." - Kean Gilbert

Despite Ethereum’s underperformance, institutions have continued to explore and experiment with staking strategies. Leveraging liquid staking tokens such as stETH address the capital lock-up issues and complicated custody structures.