Zurich-based digital asset bank offers customers up to 7% annual returns on staked Ether
Swiss digital asset bank Sygnum announced yesterday that it has become the first bank to offer Ethereum 2.0 staking services fully integrated into its platform.
Less than a month after launching a portfolio of decentralized finance (DeFi) tokens, the Zurich-based bank has expanded its suite of yield-generating products. Sygnum already provides interest-bearing term deposits on its Digital Swiss Franc stablecoin (DCHF) and offers staking for Tezos.
Now Sygnum clients can earn up to 7% annual yields by staking their Ether through a service built directly into the bank’s platform. Staked Ether is held in segregated wallets with institutional custody to ensure asset protection.
Thomas Eichenberger, Head of Business Units at Sygnum, said: “Ethereum is the second-largest blockchain protocol, and Ethereum staking is a core element for digital asset portfolios. Making staking available in a convenient, secure and regulated environment broadens Sygnum’s range of attractive, regulated yield-generating products to meet client needs and to accumulate returns beyond mere capital appreciation.”
As the Ethereum-based DeFi sector grows exponentially, a highly scalable Ethereum network becomes increasingly necessary. Ethereum 2.0’s shift to the less energy-intensive Proof of Stake consensus mechanism is expected to reduce the network’s energy consumption significantly — estimates suggest reductions on the order of 99.95% — which would lower environmental impact while addressing congestion and rising gas fees.
Thomas Brunner, Head of Accounts and Custody at Sygnum Bank, added: “Sygnum clients can now participate in the new Proof-of-Stake Ethereum and potentially benefit from higher staking rewards. This is an attractive option for long-term investors in the Ethereum ecosystem.”
The Beacon Chain — the first phase of the Ethereum 2.0 upgrade — launched in December 2020 and introduced staking. Since then, 6.2 million ETH have been deposited into the Ethereum 2.0 Deposit Contract; those holdings are currently valued at roughly $14.8 billion and represent more than 5% of the circulating supply.
The upgrade will likely take more than a year to roll out fully. However, the next phase — the London hard fork — was deployed on the Ropsten testnet last month, and August 4, 2021 has been proposed as the activation date for the mainnet.