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Crypto exchange Kraken has announced that it plans to roll out structured products to provide a staking yield for institutional investors. Kraken has had the plan in motion for some time, after acquiring a staking company called Staked last year to enter the rapidly growing market.
Following the acquisition, Kraken now wants to combine the trading services offered by its crypto exchange company and the staking power of the new firm to offer more services to institutional investors.
Kraken Products Will Be Launched Soon
Head of Staked at Kraken, Tim Ogilvie, confirmed that the company plans to introduce structured products that will use staking of futures products to achieve certain objectives. He added that the products will be launched soon.
According to Ogilvie, the products are known internally as cash, carry, and stake. This strategy is already familiar to sophisticated and institutional investors. The strategy allows investors to stake to gain rewards generated by the act while reducing the risk of exposure to the underlying asset at the same time. “You basically eliminate the underlying currency risk to allow you to get just a yield,” he stated.
The Structured Products Will Be Available To Institutional Clients
The process also offers short-term returns when the investor goes short on an underlying asset, allowing the investor to gain from funding rates. Ogilvie said Kraken can offer this type of service because it owns both futures business ad staking business. If returns were calculated based on this type of trade, Ogilvie said it would have yielded about 11.4%.
According to Kraken, the structured products will be available to institutional clients through its platform. However, the clients are required to follow the know-your-customer (KYC) and AML procedures before they are given access.
Although Staked is now part of Kraken, it still operates as a standalone business while dealing with the Kraken Exchange as a priority client. Staked runs odes on 44 proof-of-stake blockchains and has a lot of top companies as clients, including Three Arrows Capital, and MultiCoin.
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