Restake, the Swiss Staking Service Provider recently joined the EBA. Restake‘s goal is to provide effortless staking with institutional standards to institutional players – from digital asset native firms, through to traditional investment managers. Learn more about the comany’s goals, how it helps institutional players to overcome the challenges of staking, which trends it expects in 2024, and more here in our interview with Ralf Taner, Head of Business Development & Partnerships at Restake.
🎤 Ralf, please tell us a little more about Restake. Why did you set up the company and what are your goals for 2024?
Restake was created inside Lian Group’s venture studio, a Swiss investment firm with a significant commitment to and track record in the digital asset ecosystem: a portfolio of investments in crypto companies and protocols along with a substantial footprint in the infrastructure layer, where our sister firm, Cowa.ai, is now the largest European bitcoin miner and provider of high-performance compute, all powered by 100% renewable energy. Restake is an evolution in our infrastructure investments, moving deeper into the world of proof-of-stake, along with our ongoing engagement in proof-of-work.
Our company was born in the crypto valley, a thriving digital asset ecosystem, where we see Switzerland offering a stable regulatory regime. After the events of 2022, culminating in the scandal at FTX and the ensuing industry turmoil, we feel well positioned to help institutional players, from digital asset native firms, through to traditional investment managers showing increasing interest to broaden access. These investors are able to engage with us as a trusted partner to help them manage their portfolio of proof-of-stake assets.
Looking ahead for what 2024 has in store, the year has had a promising start with the US approval of spot bitcoin ETFs. This points to a much wider degree of institutional participation than previously expected. Our goals centre around viewing decentralisation and diversification as two sides of the same coin, and acknowledging that both work on a spectrum.
So for this year we want to help protocols with their decentralisation plans, where we work closely with their foundations to support their users and builders to create a flourishing ecosystem, and in turn, allowing institutions of all shapes and sizes to diversify their staking and allow for greater adoption and participation.
🎤In your eyes, what is the most challenging part about staking for institutional delegators and how can Restake help to address these?
Two main challenges we are asked about regularly are the regulatory status of staking and institutional-grade reporting. In both cases we have carefully chosen how to build our core infrastructure to meet the needs of institutional delegators.
Since we’re non-custodial, we are not regulated under FINMA’s current guidance on staking services but we make sure to follow all changes and stay well informed. We think Switzerland offers a stable and sensible regulatory setup that connects to traditional financial principles while helping to foster innovation.
This is also part of the reason we’re joining the EBA: engagement in the EBA’s Proof-of-Stake Working Group, so we stay abreast of European wide developments and share our industry expertise and help shape future policy decisions.
For clients’ reporting needs we have developed a robust Reporting API, like our SDK it is node-agnostic, so we help clients manage reporting of their entire staking portfolio, not just delegations they have made on our nodes – this helps to simplify the client’s user journey and significantly reduce the cost and complexity of staking monitoring and reporting.
🎤 What is your best advice for finance professionals that are unfamiliar with staking but would like to enter the space?
Always go back to basics to understand something unfamiliar, particularly if there are offers that sound too good to be true! The digital asset industry is made up of a wonderful community of innovators but inevitably there have been those that have tried to take advantage through scams or misrepresentation. This was all too plain to see in early 2022 when there were offers for extremely high yields with apparently no downside risks. As I heard someone coin a phrase “If you don’t understand where the yield is coming from, you are the yield!”
During the last “DeFi summer” staking became a catch-all term for any form of yield enhancement, but often without a proper explanation of the source of the yield beyond being a black box.
Education is vital and this is where it is key to understand how genuine proof-of-stake is part of a protocol’s consensus mechanism that offers both incentives for those helping secure the network but penalties if validation is not done correctly. This gives rise to a genuinely orthogonal source of rewards (vis-a-vis lend/borrow) but risks like slashing should be fully understood. At Restake we’re very keen to help educate and welcome conversations with finance professionals that are unfamiliar with staking so we can help ease their entry into the space.
🎤 Which trends will we see in staking in 2024?
We are very keen to manifest one of the main trends in staking to be a multi-staking/validator setup. This will help large delegators and platforms that want to offer staking to their clients to diversify their staking platform risk, in the same way that many investors are now insisting on multi-custodial and multi-exchange setups. We believe we have a unique approach by crafting our SDK to be fully node-agnostic and a standalone tool.
In addition, liquid staking with institutional guardrails (permissioned through KYC & AML checks) will gain traction along with ETH pooled staking and then restaking through Eigenlayer or similar protocols. There is so much innovation it can be hard to keep up, even as a professional in this space; thankfully we have a fantastic network of partners as well as our dedicated team of engineers to keep up with the cutting edge.
For example with ETH restaking, there are signs that a blend between proof-of-stake (PoS) and proof-of-work (PoW) will occur with BTC restaking. Watch this space!
Restake is actively working to deliver solutions on all these initiatives for our clients, while maintaining our maxim of “effortless staking with institutional standards”.
🎤 Why did you join the European Blockchain Association?
We have known the EBA team for quite some time and are very impressed with their in-depth knowledge of the digital asset industry, the European regulatory framework and cooperation with business, and regulators and governments. The blockchain community is at its best when consensus is built not just block by block at a protocol level, but also at industry, governmental and supranational levels, and we see the EBA as an essential partner in achieving these synergies.