Kean Gilbert, the head of institutional relations at the Lido Ecosystem Foundation, stated that Ethereum (ETH) has significantly underperformed compared to Bitcoin (BTC) and other digital assets in this market cycle. However, the growing interest from institutions in Ethereum staking is driving demand for custody solutions to support a broader investor base.
On May 27, 2025, regulated digital asset custodian Komainu began providing custody support for Lido's staked Ethereum (stETH). stETH is the largest staking token for Ethereum, accounting for 27% of all staked Ethereum (ETH).
These custody solutions are aimed at institutional investors in Dubai, United Arab Emirates, and the British Crown Dependency of Jersey.
The product offers institutional investors a compliant way to earn Ethereum staking yields as more institutional investors diversify their funds into digital assets.
Kean mentioned in an interview with Cointelegraph, "Many asset managers, custodians, family offices, and crypto-native investment firms are actively exploring staking strategies."
Meanwhile, U.S. exchange-traded fund (ETF) issuers are still waiting for regulatory clarity regarding the launch of Ethereum staking ETFs.
Despite Ethereum's poor performance, Kean stated, "Institutions find liquid staking tokens like stETH very useful as they directly address the challenges associated with capital lock-up and complex custody arrangements."
He also noted that tokens like stETH provide instant liquidity and are compatible with qualified custodians such as Komainu, Fireblocks, and Copper.
Lido has recently accelerated its push for institutional adoption, marked by the launch of Lido v3, which features modular smart contracts designed to help institutions meet regulatory compliance requirements.
Kean told Cointelegraph that custody solutions are crucial for certain institutions, such as asset managers and family offices, which are bound by strict compliance and risk management frameworks.
He stated, "Historically, the limited availability of regulated custodians or MPC wallet providers supporting stETH has posed a significant barrier for these institutions."
This contrasts with crypto-native companies, which are generally more accustomed to directly managing crypto assets and are often willing to forgo third-party custody solutions.
Kean indicated that staking Ethereum tokens like stETH are increasingly being used by traditional institutions and crypto-native firms to earn Ethereum staking rewards without long-term capital lock-up.
These tokens also provide liquidity advantages through decentralized finance (DeFi), centralized finance (CeFi), and over-the-counter (OTC) markets.
For these reasons, the demand for staked Ethereum has significantly increased. Cointelegraph reported last week that the amount of staked Ethereum on the Beacon Chain reached a new all-time high.
Related: Ethereum whales and sharks continue to buy ETH, while retail investors cash out
Original article: “Lido Executive: ETH Price Drops, but Institutions Rush to Participate in Ethereum Staking”
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