Kraken, a cryptocurrency exchange, plans to release structured products focusing on staking as part of a bid to improve its current services for institutional customers.
Kraken acquired Staked, a staking provider, late last year to enter the booming sector. The business is now attempting to integrate its staking expertise with the trading services offered by its primary exchange.
Tim Ogilvie, Kraken’s head of Staked, said in an interview that the business will develop structured products that are a variation on staking and derivative or futures products to accomplish specific objectives. He said that these products would be available in the near future.
According to Ogilvie, the products are internally referred to as cash, carry, and stake, a technique that smart investors are already using. The concept is to stake an asset and then sell a futures contract on that asset.
This strategy allows investors to receive the rewards of staking while limiting their exposure to the underlying cryptocurrency. “You effectively remove the underlying currency risk to obtain merely a dividend,” he said.
Kraken and its institutional clients would be able to purchase the structured products. To get access, customers will need to go through KYC and AML processes.
Ogilvie said that Kraken would provide liquid staking offers, but provided no other details. Liquid staking allows staking services to free up the liquidity of tokens that are presently staked.
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