Partnerships

Boerse Stuttgart Digital and Munich Re create insured staking solution for institutional investors

12.09.2023

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The partnership between Boerse Stuttgart Digital and Munich RE is being expanded. Thanks to the innovative staking insurance solution developed together with Munich Re Group, Boerse Stuttgart Digital enables its institutional clients to stake crypto assets in a reliable environment. In this article, you will find out how staking works and how Munich Re and Boerse Stuttgart Digital create a highly secure and insured offering. 

Secure and trusted staking infrastructure for institutional investors 

Boerse Stuttgart Digital and Munich Re, one of the world's leading providers of reinsurance, primary insurance and insurance-related risk solutions, have had an intensive partnership since 2022. The next stage of this collaboration will enable private and institutional investors to participate in staking in a reliable and secure environment. 

The basis for this is a staking insurance solution, which Boerse Stuttgart Digital was one of the first companies to develop together with Munich Re. 

What does staking mean? 

Staking describes the process by which investors provide their cryptocurrencies to a proof-of-stake (PoS)-based blockchain network to validate transactions and receive more units of cryptocurrency in return. This concept is different from proof-of-work (PoW), as used in Bitcoin, for example. There, complex mathematical problems have to be solved in order to create new blocks and validate transactions. 

What are staking rewards? 

Staking offers institutional investors in particular the opportunity to receive rewards as validators in the form of additional cryptocurrency units – the so-called staking rewards. 

These are key incentives for investors on the PoS blockchain network. The staking rewards are paid out in the blockchain currency and are a reward for holding and locking the cryptocurrency units – which in turn supports network security and processing capacity to the network. 

The amount of the reward depends on various factors, including: 

  • the amount of coins staked 
  • the duration of the staking 
  • the total number of participants in the network 

For institutional investors, these rewards are particularly attractive as they provide a way to generate additional income from their crypto holdings. Participating in staking via a specialized platform simplifies the process. The at times extensive requirements for this are met by a partner such as Boerse Stuttgart Digital, which provides the necessary infrastructure solutions. 

Due to the increasing popularity of staking, Dr Andre Knoerchen, Head of New Tech Underwriting at Munich Re, sees the expansion of the partnership with Boerse Stuttgart Digital as a landmark step into the digital future of the financial industry: "Digital assets are a key growth opportunity for the financial services industry. Boerse Stuttgart Digital has positioned itself as a prime player with strategic rigor and strong focus on regulatory compliance. Munich Re’s risk-taking capabilities and our Digital Asset Protection insurance perfectly complement this approach. With partners like Boerse Stuttgart Digital and Munich Re combining their strengths, the institutional adoption of digital assets is enabled to progress not only faster but also safer."  

Slashing as a security mechanism 

For the security mentioned, Munich Re comes into play, protecting validators from the loss of their invested capital with slashing risk insurance. 

"Slashing" is a central concept in staking. It stands for a security mechanism in PoS networks that aims to punish misconduct. If participants (stakers) violate the network rules – for example, by validating inaccurate transactions or operating multiple nodes to manipulate the network – some or all of the staked amount of cryptocurrency may be deducted as a penalty. 

The concept serves as a deterrent and ensures that network participants act in the best interest of the entire system. Important to know: Validators do not necessarily intentionally violate the applicable rules. For example, it is possible to propose two different blocks for the same time (Block Proposer Double Vote) or to give confirmation for two different attestations that have the same target block (Attestor Double Vote). 

But how can institutional investors mitigate these slashing risks? This is precisely where the innovative insurance solution developed by Boerse Stuttgart Digital together with Munich Re comes into play. This is comparable to liability insurance – it protects against damage without malicious intent. 

Kick-off for secure staking across Europe 

Thanks to staking risk insurance as a protection mechanism, staking is becoming interesting for institutional investors throughout Europe. As a leading infrastructure partner for integrated business solutions along the entire value chain of crypto, Boerse Stuttgart Digital offers a full-service staking solution for the entire institutional market in Europe. 

This solution comes at just the right time, as an observation of the current market and the increased interest in staking shows. Dr. Oliver Vins, Managing Director of Boerse Stuttgart Digital, underlines this: "We are delighted about the deepened partnership with Munich Re, one of the leading and highly regarded reinsurance providers, as it lays the groundwork for delivering a highly secure and insured staking solution to institutional investors across Europe. We have noticed an increasing interest from institutional investors in the staking sector, eagerly anticipating the chance to participate, provided they have complete confidence in the security of the environment. At Boerse Stuttgart Digital, we proudly embrace the role of pioneers in addressing this challenge together with Munich Re.” 

One-stop-shop for staking 

To make participation as easy as possible for institutional investors such as funds or family offices, they can rely on a staking ecosystem designed as a one-stop-shop solution. This solution includes everything needed for secure and reliable staking: 

  • staking user interface and fiduciary custody of assets by Boerse Stuttgart Digital 
  • slashing risk insurance by Munich Re 
  • staking operations through the partnership with Staking Facilities GmbH, a renowned German staking provider 

Normally, a validator requires 32 ETH to participate in staking. The uniqueness of this offering is the lowered entry barrier, which makes it particularly attractive to institutional investors of all sizes. With the one-stop-shop, you can already stake with smaller contributions. You will receive the staking rewards minus a fee. The amount of the rewards always depends on the ETH network and factors based on it, such as the number of validators and staked ETH. 

Boerse Stuttgart Digital and Munich Re set the stage for reliable staking 

With this expanded partnership, Boerse Stuttgart Digital, in cooperation with Munich Re, will offer an incomparably secure staking product that is exciting for institutional investors. The one-stop-shop solution for banks, funds, family offices and other financial institutions enables easy access to secure trading and income from the custody of cryptocurrencies. 


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