Galaxy Dominates Institutional Crypto Staking Pipeline

BNY and BlackRock are turning to Galaxy as their go-to infrastructure provider for institutional crypto staking, according to recent announcements. BNY's Digital Asset Custody platform plans to offer institutional crypto staking built on Galaxy's infrastructure, which is used by over 20% of the world's investable assets.

Galaxy also operates staking on Solana and other proof-of-stake chains. The company is one of three approved validators within BlackRock's iShares Staked Ethereum Trust (ETHB), indicating that two major players in traditional finance are relying on Galaxy for their crypto staking needs.

The arrangement has raised concerns about the concentration of power among institutional operators, as most of the active stake is held by a small number of providers. This can lead to issues such as slashing penalties and correlated penalties hitting multiple validators at once, potentially inflicting significant losses on investors.