Bit Digital, Inc. Announces Commencement Of Ethereum Staking Operations, Partnership With Blockdaemon

Bit Digital, Inc. a digital asset mining company headquartered in New York, is pleased to announce that it has formally commenced Ethereum staking operations. Bit Digital intends to delegate, or stake, its ETH holdings to an Ethereum validator node to help secure and strengthen the blockchain network. Stakers are compensated for this commitment in the form of a reward of the native network token.

This marks an expansion from Bit Digital’s core bitcoin mining operation to also validating transactions on the Ethereum blockchain. While the Company remains bullish on bitcoin, and supporting the bitcoin blockchain, it expects to derive revenue from the Ethereum network via validator rewards.

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The Company’s staking operations are enhanced by a new partnership with Blockdaemon, the leading institutional-grade blockchain infrastructure company for node management and staking. Following a similar mechanism to traditional Ethereum staking, Bit Digital will also participate in liquid staking via Portara, the liquid staking protocol developed by Blockdaemon and StakeWise and the first of its kind tailored to institutions. Liquid staking allows participants to 1) achieve greater capital efficiency by utilizing their staked ETH as collateral and 2) withdraw from staked positions earlier than natively possible by trading their staked ETH tokens on the secondary market.

Unlike other liquid staking solutions, Portara’s key differentiator is that it ensures that users can only interact with verified counterparties. As a result, several regulated institutions which were previously unable to participate in liquid staking have now on-boarded with Portara and are actively liquid staking.

As of December 20, the Company had 7,904 ETH and 2,004 sETH-h with a combined worth of approximately $12.1 million. 2,164 ETH were actively staked as of that date, using either native staking or liquid staking protocols. The Company intends to continue accumulating Ethereum and stake substantially all of its ETH position over time.

Bryan Bullett, Bit Digital’s CEO, commented: “We are excited to expand from our core bitcoin mining business into validating transactions on the Ethereum blockchain. This diversification into another blue-chip digital asset ecosystem carries the goal of creating a new, predictable, and recurring stream of digital rewards. To be clear, we will continue to invest in and opportunistically expand our mining operations. Together, we believe bitcoin mining and ETH staking are complementary business lines that will enhance our overall margin and return profiles. It’s an exciting development for Bit Digital, and one that we ultimately believe will maximize value for all stakeholders.”

Bit Digital’s Chief Strategy Officer, Sam Tabar, added: “We are extremely bullish on the Ethereum network. Following the network’s transition to a Proof-of-Stake consensus mechanism, we expect ETH will exhibit deflationary properties over time as net issuance is substantially reduced and ETH-denominated fees are burned. The notion that the transition will decrease the network’s energy consumption by 99% is also extremely compelling to us given our focus on sustainability. Ethereum serves as the foundation for the smart contract economy and DeFi broadly, and we are excited to increase our exposure to the network and support yet another leading blockchain.”

Blockdaemon CEO and Founder Konstantin Richter shared that “Blockdaemon is proud to partner with Bit Digital and provide them with best-in-class institutional-grade infrastructure for their new strategic PoS holdings. This new partnership gives Bit Digital full access to Blockdaemon’s suite of institutional staking solutions allowing them to increase their earned rewards from their crypto holdings. Blockdaemon was built from the ground up to provide institutions with products and services to enable them to scale and build blockchain-based businesses.”