Despite a challenging price performance for Ethereum (ETH) in 2025, institutional interest in Ethereum staking is surging—particularly through liquid staking solutions like Lido’s stETH. According to Kean Gilbert, Executive at the Lido Ecosystem Foundation, declining ETH prices have not dampened institutional appetite. Instead, they’re accelerating demand for compliant, scalable staking infrastructure.
As traditional financial players increasingly explore digital asset diversification, Ethereum staking has emerged as a compelling yield-generating strategy. And with new regulated custody solutions coming online, institutions now have clearer pathways to participate—without compromising on compliance or operational complexity.
👉 Discover how institutions are unlocking yield through Ethereum staking—without locking up capital.
Institutional Demand Rises Amid ETH Price Volatility
While ETH has underperformed compared to Bitcoin (BTC) and other major digital assets this cycle, Kean notes that institutional engagement with Ethereum’s ecosystem is deeper than ever. Year-to-date, ETH/USD has declined by 24%, with a 36% drop over the past six months alone. Yet paradoxically, institutional inquiries into staking strategies have never been higher.
“Many asset managers, custodians, family offices, and crypto-native investment firms are actively exploring staking strategies,” Kean said in an interview with Cointelegraph.
The growing interest stems from the unique value proposition of liquid staking tokens like stETH—Lido’s tokenized representation of staked ETH. Unlike traditional staking, which locks up capital and limits flexibility, stETH allows investors to earn staking rewards while retaining liquidity. This makes it far more compatible with institutional risk management frameworks.
With stETH accounting for 27% of all staked ETH on Ethereum—a total exceeding 34.7 million ETH as of June 12—its role as a cornerstone of decentralized finance (DeFi) and institutional crypto strategy continues to expand.
Regulated Custody Solutions Fuel Adoption
A major barrier to institutional participation in Ethereum staking has historically been the lack of compliant custody options for liquid staking derivatives. That’s changing.
On May 27, 2025, regulated digital asset custodian Komainu launched custody support for stETH in key financial hubs including Dubai, UAE, and Jersey, Channel Islands. This development marks a pivotal moment for institutional accessibility, offering a regulated gateway to earn staking yields while meeting strict compliance standards.
These solutions cater specifically to institutions bound by rigorous risk and governance requirements—such as asset managers and family offices—that cannot rely on self-custody or unregulated platforms.
Kean emphasized:
“Historically, the limited availability of regulated custodians or MPC wallet providers supporting stETH posed a significant hurdle.”
Now, with integration from trusted custodians like Komainu, Fireblocks, and Copper, institutions can securely hold stETH within compliant infrastructure. This alignment between decentralized protocols and regulated finance (TradFi) is accelerating mainstream adoption.
Why Liquid Staking Is Winning Institutional Trust
Liquid staking tokens like stETH solve two core challenges that deter institutional capital:
- Capital Efficiency: Traditional staking locks up ETH for extended periods, limiting portfolio agility. stETH unlocks liquidity by allowing holders to trade or use their staked position as collateral across DeFi, CeFi, and OTC markets.
- Operational Simplicity: Running validator nodes requires technical expertise and ongoing maintenance. Lido abstracts this complexity by pooling stake and distributing rewards automatically—making it easier for institutions to earn yield without building in-house infrastructure.
These benefits are driving adoption beyond crypto-native firms. Traditional financial entities are now evaluating stETH not just as a yield instrument, but as a foundational component of diversified digital asset strategies.
Moreover, the launch of Lido v3—featuring modular smart contracts designed for enhanced compliance and interoperability—signals a strategic shift toward enterprise-grade usability. The upgrade enables better integration with institutional tooling, audit trails, and regulatory reporting systems.
Ethereum Staking Hits All-Time Highs
Despite price headwinds, network fundamentals remain strong. According to Beaconcha.in, the total amount of ETH staked on the Beacon Chain reached a record 34.7 million ETH on June 12, 2025—highlighting robust underlying demand.
This growth reflects a broader trend: while retail investors may be exiting positions during downturns, institutional and whale investors are accumulating. Their focus is shifting from short-term price speculation to long-term value creation through participation in network security and yield generation.
The convergence of regulated custody, liquid staking innovation, and improving protocol design suggests that Ethereum’s institutional onboarding phase is entering a new stage—one defined by compliance, scalability, and sustainable yield.
Frequently Asked Questions (FAQ)
Q: What is liquid staking?
A: Liquid staking allows users to stake their Ethereum (ETH) and receive a tokenized version (like stETH) that represents their staked position and accrued rewards. This token remains liquid and can be used in DeFi protocols, traded, or held without being locked.
Q: Why are institutions choosing stETH over direct staking?
A: Institutions prefer stETH because it offers liquidity, compatibility with regulated custodians, and avoids the operational burden of managing validator nodes—all while earning competitive staking yields.
Q: Is stETH safe for institutional investors?
A: Yes. With growing support from regulated custodians like Komainu, Fireblocks, and Copper, stETH is becoming increasingly accessible within compliant frameworks. Its integration with audit-ready systems enhances transparency and risk management.
Q: How does Lido v3 improve institutional adoption?
A: Lido v3 introduces modular smart contracts that enhance security, upgradeability, and compliance. These features make it easier for institutions to integrate staking into existing financial workflows and meet regulatory reporting requirements.
Q: Can stETH lose value compared to ETH?
A: While stETH is designed to track ETH 1:1 over time, its peg can fluctuate slightly due to market dynamics. However, mechanisms like rebase adjustments and liquidity incentives help maintain stability.
Q: Where can institutions store stETH securely?
A: Institutions can store stETH through regulated custodians such as Komainu (available in Dubai and Jersey), Fireblocks, and Copper—platforms that offer MPC wallets and enterprise-grade security.
👉 Access secure, compliant staking solutions trusted by global institutions.
The Road Ahead: Bridging DeFi and TradFi
The momentum behind Ethereum staking reflects a broader shift in how institutions engage with blockchain technology. It’s no longer just about holding digital assets—it’s about actively participating in their ecosystems to generate yield, enhance capital efficiency, and align with decentralized governance models.
As regulatory clarity improves and infrastructure matures, products like stETH are poised to become standard components of institutional portfolios—much like bond yields or dividend-paying stocks in traditional finance.
For forward-thinking organizations, the combination of Ethereum staking, liquid staking tokens, and regulated custody offers a compelling trifecta: yield generation, compliance readiness, and future-proof exposure to one of the most secure and widely adopted blockchain networks in the world.
Core Keywords: Ethereum staking, stETH, institutional adoption, liquid staking, regulated custody, Lido v3, Beacon Chain, DeFi yield