2023: A Challenging Year for Crypto Companies
In the dynamic world of cryptocurrency, 2023 has been a tough year for companies in this space. According to data from PitchBook, venture capital investments in crypto companies have dropped by a staggering 68% compared to the previous year, 2022. While it’s true that these companies still managed to raise $9.5 billion, this is a small fraction of the $30 billion raised in 2022.
Despite these challenges, there are some startups that have managed to thrive. One such company is French crypto startup Kiln, which recently closed a successful funding round, raising $17 million in December 2023. The round is being led by 1kx, with participation from Crypto.com, IOSG, Wintermute Ventures, KXVC, and LBank. Additionally, some existing investors have also reinvested in the company.
If you’re familiar with the big names in the crypto world, you may not have heard of Kiln. That’s because this company has focused on providing white-label infrastructure-focused products. Some well-known companies, including Ledger, Crypto.com, and Coinbase, rely on Kiln’s technology for their pooled staking services in their non-custodial wallets (Coinbase Wallet, Ledger Live, etc.).
“Staking consists of locking crypto assets in a blockchain to secure it and its transactions. Users are incentivized with financial rewards for staking their assets.”
Several proof-of-stake blockchains, such as Polygon, Solana, and Avalanche, allow their users to stake crypto assets. However, the largest proof-of-stake blockchain by far is Ethereum, which made the switch to this mechanism in September 2022.
In this ecosystem, Kiln offers a suite of smart contracts that make staking simple and convenient. Through these on-chain contracts, Kiln programmatically manages staking for users. With a single transaction, users can participate in Kiln’s staking pools and start earning rewards. Kiln and its partners also receive a commission, which is automatically handled by the smart contract.
And it’s proven to be incredibly successful. As of now, the company manages a staggering 1,168,288 staked ETH, which, at current exchange rates, is almost $3 billion in assets under management. In the past year alone, Kiln has seen a 5x increase in its “stake under management.”
“Kiln leads the market as the largest operator of Ethereum validator nodes.”
In addition to its on-chain products, Kiln also has SDKs and APIs that make it easy to integrate its staking pools into other platforms. The company also operates a large network of validators. In fact, on the Ethereum blockchain, Kiln currently holds the top spot as the largest operator of validator nodes, with over 4% of the market share according to Rated data.
Kiln’s head of marketing, Marie Siegrist, explained, “Operating our own validator nodes allows us to guarantee the highest level of security while optimizing for the best financial performance. It also helps us improve monitoring and strengthens our legitimacy as a company, especially with strategic partners such as the Ethereum Foundation, who shares our best practices and anti-slashing strategy.”
There are multiple ways to offer staking or “pseudo-staking.” Many centralized exchanges, including Coinbase and Binance, offer staking rewards, managing users’ assets on their behalf. Liquid staking protocols, such as Lido, provide users with a different token to represent their staked ETH.
However, for those looking to integrate one-click staking into a non-custodial wallet, Kiln is an excellent white-label technology provider. Their low-level approach to staking has even led some companies to ask Kiln to operate dedicated validators for them.
“This announcement reaffirms our commitment to expanding our enterprise-grade staking platform, and we are thrilled to have the support of leading digital assets investors who will help us achieve our goals… Currently, we have a variety of exciting products in the works, and we look forward to expanding internationally with the opening of our office in Singapore.”
– Kiln co-founder and CEO Laszlo Szabo
Since its inception, Kiln has raised a total of $35 million. The company earns a commission on staking rewards, which means that their revenue will grow in tandem with their assets under management.
