Asymmetry Finance Joins Liquid Ethereum Staking Market With Latest $3M Raise

Decentralized finance (DeFi) and liquid staking protocol Asymmetry Finance today announced that it has raised $3 million in a seed funding round led by venture capital fund Ecco Capital. 

This brings Asymmetry Finance to a total valuation of $20 million. The funding round also included Republic Capital, GMJP, and fellow staking provider Ankr. 

Asymmetry says it will use the funds to develop, add talent, and onboard more users and institutions to its platform, which also launches today.

The flagship project of Asymmetry Finance’s protocol is Simple Asymmetry Finance Ethereum (safETH), a token issued to customers staking ETH on the platform. The protocol touts itself as user-friendly, with a “fee-free decentralized asset basket” that “directly mitigates risks such as the central point of failure, and a singular dominant custodian, at risk of possible regulation.”

Asymmetry’s protocol is hoping to pitch itself as an alternative to the decentralized Ethereum staking services offered by platforms like Lido Finance and Rocket Pool. While they bill themselves as decentralized, their sheer popularity can quickly make them a point of attack for a large portion of the network. 

Per Rated, a staking node operator data dashboard, Lido currently has more than 187,000 different nodes staking ETH. However, these nodes are all operated by just 30 different node operators, for example.

Lido also commands more than 30% of the entire liquid staking market, with over 6.2 million in ETH currently deposited on the platform.

What is Ethereum staking?

Ethereum first began its transition to a proof-of-stake consensus algorithm in December 2020 with the launch of its Beacon Chain. As of September last year, following the successful execution of the merge, the network has finally left its proof-of-work days in the past.

Now, instead of warehouses of mining machines running non-stop to verify transactions and secure the network, Ethereum uses so-called validators. In order to become a validator, users must first put up 32 ETH and maintain the necessary hardware requirements. For doing so, they can earn an ETH-denominated yield; failing to do so, be it due to downtime or validating fraudulent transactions, means validators are penalized.

At roughly $60,000, the 32 ETH entry barrier is steep for many.

This is in part why the liquid staking scene has become so popular. These protocols let anyone deposit any amount and begin earning rewards.

Some have also raised the issue of the lion’s share of Ethereum nodes currently running on cloud services, the majority of which are hosted by Amazon Web Services.