Stake it till you make it: Turning assets into rewards

In the evolving digital asset landscape, staking has emerged as a novel strategy for institutions looking to optimize their crypto asset holdings. But what exactly is staking, and how can it become a strategic advantage for your business? Let’s explore the benefits and challenges of partnering with a regulated custodian.

The Basics

Staking is a process of locking up crypto assets in a blockchain network to participate in transaction validation. This is possible in the proof-of-stake (PoS) blockchains, where validators secure the network in exchange for rewards. For institutions, staking isn’t just a technical process—it’s a way to contribute to network security, stability, and resilience.

1. Network Security: Staked assets incentivize honest behavior, with penalties (like slashing) for malicious or faulty actions.

2. Earning Rewards: Validators earn rewards through newly minted tokens or transaction fees, transforming idle assets into a new passive income stream.

What is At Stake?

For financial institutions, staking offers more than just steady returns; it’s a strategic move to diversify portfolios and engage more deeply with the crypto ecosystem.
Key advantages include:

• Passive Income: Generate a steady income stream, enhancing your portfolio performance.

• Portfolio Diversification: Exposure to the rapidly growing crypto market, offering a hedge against traditional market volatility and inflation.

• Network Influence: Participation can drive innovations and governance decisions that align with your long-term sustainability and security goals.

Staking with a Qualified Custodian

Partnering with a regulated custodian for staking brings an added layer of security, compliance, and operational efficiency—critical factors for managing large-scale investments. Here’s why it’s beneficial:

• Regulatory Confidence: A regulated custodian ensures your staking activities align with all EU legal and security standards, minimizing the risk of regulatory issues and ensuring peace of mind.

• Risk Management: With expert strategies in place, custodians protect your assets against risks like slashing and optimize staking ratios while maintaining robust asset security.

• Flexible Liquidity: Even with staking lock-up periods, a qualified custodian can enhance your liquidity options, offering you greater flexibility and asset access when needed.

Considerations and Challenges

While staking offers significant opportunities, it’s not without challenges. Market volatility can impact the value of staked assets, and operational complexity can pose significant burdens without the right expertise.

Institutions may choose to stake independently, but this often involves considerable upfront costs, legal hurdles, and the need for specialized infrastructure. Additionally, managing the regulatory compliance and security aspects of staking can add further layers of complexity and risk.

However, these risks can be mitigated by partnering with a trusted custodian who not only simplifies the staking process but also ensures full regulatory compliance, security, and operational efficiency. This allows you to focus on your core business while maximizing the returns on your digital assets.

Your Strategic Advantage

At Tangany, we view staking not just as a trend, but as a powerful strategy for institutions seeking to unlock the full potential of their digital assets. By partnering with a regulated custodian, you can turn idle assets into a steady income stream while enhancing network security and compliance - all with the quality and trust of a solution made in Germany. As the crypto space continues to evolve, staking will play a vital role in shaping its future. Embrace this opportunity to stay ahead in a rapidly changing market.

Currently, we offer staking for Ethereum, Solana, and Cardano, with more assets to be added soon. To discover how staking can benefit your institution and learn more about Tangany's German-engineered solution, contact us at info@tangany.com