As a leading example of the outstanding maturity of the Swiss institutional crypto market, Maerki Baumann has collaborated with SDX Web3 and InCore Bank to offer Ethereum staking services to their clients. This will be even more attractive from an investor’s perspective after the implementation of the so-called “Shanghai Release” since Ether coins allocated to staking can be withdrawn again thereafter.
Proof of Stake blockchain networks, such as Ethereum, rely on staking to validate transactions. Staking is an umbrella term used to denote the act of pledging crypto-assets to a protocol to earn rewards in exchange. Staking allows users to participate in securing the network by locking up tokens, and act as the Web3 industry’s yield. The staking market is becoming more and more institutionalised and requires solutions built with a strong sense of customer focus, scalability and security.
By working with partners who are regulated by FINMA, Maerki Baumann can offer Ethereum staking capabilities to their clients that are fully compliant with all KYC and AML regulations. In this partnership, the transaction bank InCore provides crypto brokerage, banking operations and custody services, while SDX Web3 operates and hosts the Ethereum nodes.
Dr. Stephan A. Zwahlen, CEO of Maerki Baumann & Co. AG, who was the driving force behind the implementation of the private bank’s crypto strategy, highlights the value of the new offering: “Staking is an integral part of an advanced crypto offering. It allows the investor to profit from additional return potential in the form of capital gains but also current yields. We are committed to our partnership with InCore and Web3 Services to access professional staking services for our clients.”
Mark Dambacher, CEO InCore Bank, stated, “We perceive an increasing interest in staking and ways to participate in the decentralized economy. InCore Bank’s fully integrated and future-oriented staking services via segregated wallets, enable Maerki Baumann to offer staking to their clients within a convenient, secure, regulated and tax compliant setting. We are proud to be part of this strategic alliance”.
David Newns, Head of SDX adds: “This partnership between established digital asset institutions is the first of its kind in Switzerland. We are strengthening the Swiss digital asset ecosystem by enabling key market players to provide value adding services like Ethereum custody and staking that their clients are asking for.” Stephan Kunz, Head of Web3 Services, concludes: “The SDX Web3 Ethereum staking service is tailored to institutional clients who need to scale their staking capabilities. This offering is a straightforward and secure way to launch new validators and generate yield from staking.”
What is Ethereum staking services
Blockchain networks are based on the principle of decentralisation, there is no central entity that decides on the correct transaction history. Nevertheless, a consensus mechanism is needed to ensure in a decentralized pattern that transactions are validated in correct order and in a secure manner. Blockchains typically reach consensus in two ways, either by so-called Proof-of-Work (PoW) or Proof-of-Stake (PoS) mechanisms.
In PoS blockchains like Ethereum, to guarantee consensus, no power-intensive computing power is used. Rather, capital needs to be expended in the form of the blockchain’s own coin. These coins must be “staked”, i.e. made available to the network and bound by it for the staking period. For individuals who hold digital assets of proof-of-stake networks, staking is mandatory in order to avoid dilution of their own position. Due to this fact, it can be assumed that in the near future, there will be an increasing merger of custody and staking.
Staking is an umbrella term used to denote the act of pledging crypto-assets to a cryptocurrency protocol to earn rewards in exchange. Staking allows users to participate in securing the network by locking up tokens. The “stakers” become validators who add new transactions to the respective blockchain. At the same time, the validators follow the so-called consensus rules. These set the rules of the game according to which the various network participants have to comply. If, as a validator, you violate the network’s consensus rules during this process, you put your own capital at risk in the form of the coins you have staked. This ensures validators have an incentive to abide by the rules.
About Maerki Baumann
The Zurich-based private bank Maerki Baumann & Co. AG was founded in 1932. For generations, it has focused on its core competencies in the areas of investment advice and asset management as well as in serving independent asset managers. Steeped in tradition, the private bank sets itself apart as a non-listed family company. Its investment philosophy, which is geared towards independence, security and transparency, is reflected, for example, in a very solid equity base and comprehensible reporting. With its innovative modular investment approach and comprehensive crypto services, the private bank underlines its claim of combining the tried-and-tested with the new. Maerki Baumann currently manages more than CHF 9 billion in client assets, primarily from Switzerland and Germany.
About InCore Bank
InCore Bank is a B2B transaction bank founded in 2007 and trusted by numerous private banks, securities firms, asset managers, institutional investors and fintech companies. The Swiss company with a banking and securities firm license stands for a highly capable comprehensive package: from traditional banking to digital assets, outsourcing, white-label investment products and other services. In 2020, InCore Bank became the first B2B bank to receive FINMA approval for banking services with digital assets. This makes it the first choice for companies when it comes to secure access to digital assets. InCore Bank feels at home in both the traditional and digital world. It operates the largest private banking hub based on Finnova Banking Software.
About SDX Web3 Services
SDX Web3 is a newly founded business line focusing on supporting our clients’ Web3 activities. As part of SIX, SDX Web3 is subject to the Group’s high quality and security standards in providing institutional grade infrastructure services for which SIX and SDX are well known (https://web3.sdx.com).
About SDX
SDX is licensed by the Swiss Financial Market Supervisory Authority (FINMA), to operate an Exchange and a Central Securities Depository (CSD). SDX offers issuance, listing, trading, settlement, servicing, and custody of digital securities.
SDX went live in Q4/2021, and continues to work with partners, its current members (UBS, Credit Suisse, Zürcher Kantonalbank, CM Equity) and future clients to promote and build a new market structure for digital assets globally.
