The Future of Ethereum’s PoS Mechanism in Investment Institutions and Family Offices

On April 14th, at the 2023 Web3 Carnival in Hong Kong, Zero CHU, the head of Bitnet Asset Management, shared his views during a roundtable discussion on “Stacking Economics and Regulation”. He pointed out that ETH’s PoS mechanism and huge liquidity will attract investment institutions and family offices to pledge ETH. With the emergence of projects such as lowering the threshold for pledge and new LST machine gun pools, it is believed that the pledge track will unleash a new round of innovation and flywheel. The regulation by the US Securities Regulatory Commission does not mean that the crypto community will fall into a passive situation, but rather promotes communication. Bitget is committed to building its own compliance team, promoting licensing matters, and is currently actively applying for licenses in Hong Kong and other places, actively communicating with regulatory authorities.

Zero CHU, Bitget Asset Manager: ETH’s PoS mechanism and high liquidity will attract investment and pledge

Introduction

On April 14th at the 2023 Web3 Carnival in Hong Kong, Zero CHU shared his views during a roundtable discussion on “Stacking Economics and Regulation”. His insights on Ethereum’s Proof of Stake (PoS) mechanism creating attractive opportunities for investment institutions and family offices sparked a discussion on how the pledge track will continue to unleash new innovations.

What is Ethereum’s PoS Mechanism?

Ethereum is migrating from Proof of Work (PoW) to PoS as part of its transition to Ethereum 2.0. PoS works by validators in the network staking or holding Ethereum as collateral, which prevents them from attempting to subvert the network. By staking Ethereum, the validator is incentivized to maintain the network’s security and integrity. This creates a new use case for Ethereum as more and more validators stake their tokens.

Attraction of Ethereum’s PoS Mechanism

According to Zero CHU, Ethereum’s PoS mechanism provides huge liquidity, making it an attractive option for investment institutions and family offices. These entities can now pledge their Ethereum tokens as collateral and earn interest while maintaining and securing the network. Additionally, with the emergence of projects that are lowering the threshold for pledges and new LST machine gun pools, Ethereum’s pledge track can unleash a new round of innovation and flywheel.

US Securities Regulatory Commission and Crypto Regulation

The US Securities Regulatory Commission’s regulation of the crypto industry doesn’t signify a passive situation for the crypto community. It rather promotes communication, a point stressed by Zero CHU during the roundtable discussion. To comply with these regulatory standards, Bitget is actively building its own compliance team and promoting licensing matters. The company is currently applying for licenses in Hong Kong and other places while engaging with regulatory authorities.

Innovative Opportunities for Investment Institutions and Family Offices

As Ethereum’s PoS mechanism gains popularity, investment institutions and family offices can capitalize on the pledge track to earn interest on their Ethereum investments. Additionally, this trend creates an opportunity for organizations to lower the threshold for entering the pledge track, thereby reducing risks for new entrants.

Conclusion

Ethereum’s shift from PoW to PoS is creating new opportunities for investment institutions and family offices. By staking Ethereum tokens, these organizations can earn interest while maintaining and securing the network. With the emergence of projects that are lowering the threshold for pledges and new LST machine gun pools, Ethereum’s pledge track can unleash a new round of innovation.

FAQs

1. How does Ethereum’s PoS mechanism work?

Validators in the Ethereum network stake or hold Ethereum as collateral, incentivizing them to maintain the network’s security and integrity.

2. Why is Ethereum’s PoS mechanism attractive for investment institutions and family offices?

Ethereum’s PoS mechanism provides huge liquidity, making it an attractive option for investment institutions and family offices. These entities can now pledge their Ethereum tokens as collateral and earn interest while maintaining and securing the network.

3. How is Bitget complying with regulatory standards?

Bitget is actively building its own compliance team and promoting licensing matters. The company is currently applying for licenses in Hong Kong and other places while engaging with regulatory authorities.