Coinbase is supporting the development of the first "enterprise-grade" liquidity staking protocol, bringing KYC to the DeFi world.

Liquidity staking involves using pledged assets as collateral for activities such as trading and lending without having to lock them up. This is achieved by offering tokens to stakers in exchange for the tokens they staked, which in turn can be used forother activities inthe Web 3andDeFi economy. Coinbasefurther stated that Alluvial's vision is to adopt an open and transparent process development protocol, and move towards community governance through a decentralized autonomous organization (DAO) with extensive industry participation.

Liquidity staking on Ethereum (ETH) has risen from less than 1%of staking in January2021toover30%today.Coinbase said that while more and more companies also want to participate in liquidity staking, current solutions do not meet their needsin terms of security andKYC/anti-money laundering ( AML ) regulations. As the developer of a new liquid staking protocol, Alluvial seeks to bridge the gap between existing liquid staking solutions and the needs of companiesby requiring contributors to enable embeddedKYCandAML checks.

Mara Schmiedt,senior managerof Coinbase Cloud at Coinbase, agrees.

" Institutional investors need to understand their counterparties, and enterprise-grade security is a top priority."

Alluvialis developed by a team led by three founders:

Matt Leisinger,former head of Figment (Liquid Collateral Products);

Nicolas Maurice,former CTO of Kiln (staking platform);

Mike Taormina,former Head of Institutional Business at Index Cooperative DAO .

Mattsaid that Alluvialwill initially support staking on Ethereum , with plans for multi-chain support in the future. The agreement is expected to be launched later this year. It alsodeclined to comment on whether Alluvialhas raised any funds, or whether CoinbaseandFigment are investors in the project.

in conclusion:

Lido, the current market-leading liquidity staking protocol,has nearly $ 9billion in assets locked up by clients,according toDeFiLlama . Crypto staking has become popular in the last year, including liquidity staking. Liquid staking allows investors to earn original staking rewards and use the same funds to earn additional returns through decentralized financial platforms. Currently,traditional staking platforms includingFigmentandBlockdaemon are also working hard to launch liquid staking services for institutional clients.