Kraken and ConsenSys back Kiln in a $17 million funding round

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Last Updated on November 29, 2022 by Bitfinsider

ConsenSys and the venture arm of cryptocurrency exchange Kraken have invested €17 million ($17.6 million) in institutional staking platform Kiln. The October equity round was headed by Illuminate Financial and included participation from GSR, LeadBlock Partners, Spark Ventures, Alven, and Blue Yard Capital.

Laszlo Szabo, the company’s founder, declined to divulge the number but acknowledged a considerable valuation increase.

Kiln is a member of a group of service providers that has attracted investor attention by enabling institutions to participate in staking, the process of safeguarding the blockchain in exchange for cryptocurrency incentives. Competitor Figment raised $50 million in the previous year, while Kraken acquired Staked.

Kiln distinguishes itself from the competition by providing aggregation tools that permit betting not just on its own validators, but also on those of its rivals.

“We let the user to distribute the bet over our validators as well as other validators,” explains Szabo. Consequently, the risk will be shared across numerous suppliers.

It also provides a dashboard tool utilized by Binance’s U.S. subsidiary that enables organizations to monitor staking across various protocols and blockchains, and will eventually enable the automation of such operations for exchanges.

“In the future, someone will stake on the Binance interface; in the background, it will communicate with our API, and everything will occur automatically,” Szabo explained.

The increase by Kiln comes at a time of market turmoil. Gemini terminated its Earn product last week when cryptocurrency lender Genesis froze withdrawals, but Szabo believes there is still room for staking.

“In staking, there is no counterparty risk; the protocol is the counterparty,” he explained. “In the view of everyone, staking is currently the most secure income in crypto.”

Nonetheless, with the collapse of the cryptocurrency exchange FTX, exchanges like as Gemini, OKX, and Crypto.com suffered significant outflows as sales of non-custodial wallets, such as those supplied by Ledger and Trezor, rose.

However, Szabo feels Kiln has sufficiently diversified its product portfolio to weather the storm. Wallets, custodians, and exchanges can also incorporate staking services through API and smart contract code. Recently, it formed a relationship with hardware wallet manufacturer Ledger to allow Ethereum staking, and a cooperation with a noncustodial wallet is in the works.

Additionally, notable financial institutions are beginning to express interest in Kiln. Notably, Avon Ventures, a venture fund linked with Fidelity Investments, joined in the financing, according to Szabo. Avon Ventures is seeking to offer bitcoin exposure for its retirement plans.

“We’re beginning to see more conventional financial giants,” he added, highlighting Avon Ventures’ involvement in the round.


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