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Happy Thursday, advisors!
In today’s newsletter, Will Shannon from Lido explores the changes to the Ethereum blockchain and staking, as more institutions leverage their assets for income.
In Keep Reading, learn about the U.S. Securities and Exchange Commission’s proposal to overhaul crypto custody rules for registered investment advisors, clarifying how firms must safeguard client digital assets.
Happy reading.
How staking on Ethereum is changing in 2026
Staking income is becoming a balance sheet item
Ether staking is no longer reserved only for crypto-native users. Institutional staking now represents a material amount of total staked ETH, and that trend is accelerating. Bitmine’s latest quarterly filing showed 98% of its revenue came from staking, evidence that it has become a primary earnings driver for public companies holding ETH.
That’s also what separates ETH treasury companies from bitcoin treasury companies. Bitcoin holdings can’t generate native yield, so a BTC treasury company has no equivalent income source on its balance sheet. An ETH treasury company can generate on-chain rewards, and that income is now material enough to shape how these companies report earnings.
The case for staking ETH in 2026
Many investors buying and staking ETH see it as a bet on the future of finance taking place on Ethereum. The network’s roadmap backs that up; it’s pushing hard toward post-quantum resilience while increasing scalability, two differentiators for long-term institutional exposure. Glamsterdam, expected in the second half of 2026, is one stepping stone in this direction, with further upgrades planned to keep building out the network’s resilience and scalability.
Decentralization is also a stated goal of the roadmap as the network scales. A more decentralized network validator set makes the network more resistant to censorship and single points of failure, which is part of what institutions are actually underwriting when they hold and stake ETH.For institutions already holding ETH, staking ETH is what puts that exposure to work rather than leaving it idle. How much liquidity that costs depends on the structure. Native staking locks ETH for the staking period, while liquid staking issues a token representing the staked position, so the client retains the ability to trade or otherwise use that value while it continues earning.Ethereum’s roadmap is also making that staking infrastructure more institutional-grade. Enshrined proposer-builder separation, part of the Glamsterdam upgrade, decreases the trust assumptions for how block production depends on off-chain intermediaries. In practice, that gives large allocations a more standardized, transparent process to plug into, making it easier for institutional staking providers to manage validator fleets on a manager’s behalf.
What advisors should ask before recommending a staking product
Staking products vary widely in structure, and a few questions separate the ones worth recommending from the ones that carry hidden risk.
Who bears the loss if a validator is slashed should be spelled out clearly to the client. How the protocol or staking provider manages resilience, via infrastructure redundancy or stake distribution and decentralization, is also an extremely important factor to understand. It’s also worth asking whether the product locks ETH for the staking period or uses liquid staking, which lets the client trade or use their staked position’s value while it continues earning.
Understanding how staking protocol rewards are generated is also key to recommending staking. Protocol rewards, the base rewards validators earn for proposing and validating blocks, make up a larger share than MEV (maximal extractable value, the extra revenue validators can capture by choosing how to order transactions within a block). This matters because protocol rewards are predictable and tied directly to network issuance, while MEV income has become more variable, so a shift toward protocol rewards changes how stable and forecastable a client’s return actually is.
Custody is worth its own scrutiny. Requirements here are often driven by regulatory obligations rather than by a genuine security upgrade on its own, so advisors should understand what a client gains or loses in flexibility by going through a custodian rather than by direct integration into DeFi.
— Will Shannon, head of node operator mechanisms, Lido
Keep Reading
The U.S. Securities and Exchange Commission has submitted a proposal to overhaul crypto custody rules for registered investment advisors, clarifying how firms must safeguard client digital assets.
Ethereum developers propose a first step to protect ETH staking from quantum attacks.
Stablecoin rewards have become the most contested provision in the Clarity Act, three weeks before the Senate’s September 15 vote.
Looking for more? Receive the latest crypto news from coindesk.com and market updates from coindesk.com/institutions.
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Anvil: The Missing Collateral Layer
Anvil: The Missing Collateral Layer
Anvil is a shared on-chain collateral layer built on a programmable letter of credit: reserve assets as a guarantee -no loan, no interest, keep custody & yield.
Anvil is a shared on-chain collateral layer built on a programmable letter of credit: reserve assets as a guarantee -no loan, no interest, keep custody & yield.
Why it matters:
Anvil is a shared on-chain collateral layer built on a programmable letter of credit: reserve assets as a guarantee -no loan, no interest, keep custody & yield.
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