Ethereum is significantly underperforming Bitcoin in this market cycle, but growing institutional interest in Ethereum staking is driving demand for custody solutions. According to Kean Gilbert, head of institutional relations at Lido Ecosystem Foundation, this trend is enabling broader investor participation through regulated pathways.
Komainu Launches Regulated stETH Custody
On May 27, Komainu, a regulated digital asset custodian, became the first provider to offer custody for Lido Staked ETH (stETH), the dominant liquid staking token accounting for roughly 27% of all staked Ether.
This new service targets institutional clients in key regulatory jurisdictions including Dubai (UAE) and Jersey.
A Path to Institutional Ethereum Staking Yields
The launch provides a compliant pathway for institutional investors to access Ethereum staking yields at a time when asset managers and other large players are diversifying into digital assets.
Gilbert commented:
“Many asset managers, custodians, family offices and crypto-native investment firms are actively exploring staking strategies,” Gilbert told Cointelegraph.
Furthermore, prominent U.S. exchange-traded fund issuers await regulatory clarity for Ethereum staking ETFs.
ETH is down 24% year-to-date and 36% over the past six months. *(Source: TradingView graph showed below)*
Gilbert explained:
Despite the poor performance of Ether itself, “Institutions find liquid staking tokens like stETH useful because they directly address challenges related to capital lock-ups and complex custody arrangements,” according to Gilbert.
He noted stETH tokens provide immediate liquidity and are compatible with qualified custodians such as Komainu, Fireblocks and Copper.
Lido Expands Institutional Push
Lido’s institutional strategy has accelerated, highlighted by features like modular smart contracts introduced in Lido v3. This aims to help institutions satisfy regulatory compliance requirements, potentially opening doors to custody services.
Gilbert emphasized the critical importance of custody solutions:
“Historically, the limited availability of regulated custodians or MPC wallet providers supporting stETH was a significant barrier for these institutions,” he observed.
This contrasts with crypto-native firms, which tend to manage their assets directly and are less inclined to use third-party custodians.
He stated staked Ether tokens like stETH are increasingly serving as convenient entry points for both traditional and crypto-native institutions seeking exposure to Ethereum staking rewards without long-term capital lock-up.
Staked ETH on the Beacon Chain recently reached an all-time high.
This growing institutional adoption of staked ETH underscores the maturing of the ecosystem around regulated digital asset services.
