Tl;dr: Enterprise-grade liquid staking is an industry gap. The first-ever enterprise-grade liquid staking protocol is being launched by a highly experienced team of founders, with early support from Coinbase Cloud and Figment.
We couldn’t be more excited to announce that Coinbase Cloud, in collaboration with Figment, is supporting a group of experienced founders and operators who are building the first enterprise-grade liquid staking protocol.
The founding team of Alluvial, the software development firm developing the new protocol, is led by Matt Leisinger, former Head of Liquid Staking products at Figment; Nicolas Maurice, the former CTO of Kiln staking-as-a-service platform, and Mike Taormina, former Head of Institutional Business at the Index Cooperative, a decentralized community powering on-chain crypto structured products. Alluvial’s vision is to grow the protocol — and the ecosystem at large — by building standards that are open, transparent, and incentive aligned, and move towards a community-governed future. Alluvial intends for the protocol to ultimately be governed in a decentralized manner by a DAO with broad industry participation.
Liquidity is a critical component of a maturing web3 economy and we are excited to be a part of a group of industry leaders tackling one of the most rapidly growing yet nascent segments of the market together: liquid staking.
Liquid staking opens up opportunities to efficiently utilize staked assets as collateral to trade, lend, and provision quickly and strategically. Staking requires assets to be locked to use as collateral to support network security in return for earning rewards. Traditionally, staked tokens remain locked and inaccessible while staked and are subject to “warm up” and “unbonding” periods.
With liquid staking, token holders don’t need to choose between staking, and accessing their assets to pursue other opportunities. They can stake their tokens, receive back receipt tokens that evidence ownership of their staked tokens and use those receipt tokens to participate in the broader web3 economy. Liquidity is key to unlock the next chapter of financial innovation in web3.
In just under a year, in Ethereum alone, liquid staking has gone from sub-1% penetration in January 2021 to around over 30% penetration. More and more enterprises and institutions are looking to participate in liquid staking every day. However, today’s solutions don’t meet their needs. Mature and regulated businesses need to know their counterparties and require enterprise-grade reliability, security, and KYC / AML processes.
Alluvial seeks to tackle this industry gap by creating the industry standard for enterprise-grade liquid staking across multiple protocols. The non-custodial protocol will require all contributors to enable embedded KYC/AML checks, allowing enterprises and institutions to meet their compliance standards while enabling seamless integration into their existing technology stack. We are proud to support the Alluvial founding team as they work to build and scale the protocol.
As part of the initial validator set, Coinbase Cloud and Figment intend to each perform staking services on the network, and run validators with distinct clients in different regions and cloud providers, with other industry-leading operators joining soon. Client diversity and multi-cloud/multi-region infrastructure will provide enterprises and institutions with the high uptime and reliability that they are looking for. Over time, new security focused validator operators will be added to the protocol to help it grow and scale further.
We are looking forward to supporting Alluvial’s experienced founding team, other industry leaders and the community at large to bring this initiative to life over the coming year. We aim to support the growth of the protocol by working with more builders, participants, and validators across the ecosystem. If you are an enterprise or institution looking to explore the world of liquid staking, or an ecosystem system partner looking to build on the protocol, get in touch with the Coinbase Cloud team.