Telecom giant Deutsche Telekom, parent company of T-Mobile, has announced that it will run a validator to support Ethereum staking.
The German company said Thursday that its T-Systems Multimedia Solutions (MMS) division is working with proof-of-stake app and DAO StakeWise to operate a pool, allowing customers to take part in validating transactions without having to run a validator themselves.
Ethereum earlier this month moved over to proof of stake in a long-anticipated transition known as the merge. The switch makes the cryptocurrency far more energy efficient by eliminating the need for miners and replacing them with validators.
“As a node operator, our entry into liquid staking and the close collaboration with a DAO is a novelty for Deutsche Telekom,” Head of Blockchain Solutions Center at T-Systems MMS Dirk Röder Head said in a statement. Liquid staking refers to the service of giving your funds to a third party to stake—pledging assets to the network for a given period of time—and in return receiving another token that can be used elsewhere.
Deutsche Telekom believes liquid staking via their new service will attract customers because it, like other such services such as Lido, saves them the hassle of having to set up a validator node—and it is cheaper (to set up your own node, you need to 32 ETH, which at today’s price is around $43,338.)
Such services are becoming increasingly popular now that the top network for DeFi and NFTs has switched over to proof of stake. Previously, Ethereum miners would use lots of computers to process transactions on the blockchain—a highly energy-intensive business. Now on proof of stake, anyone can get involved by staking the blockchain’s native cryptocurrency, ETH.
Those who participate in staking essentially help to validate transactions and secure the network. In return, these participants are rewarded in newly minted ETH.
Deutsche Telekom has been involved in the crypto world for some time. Last year, it invested in Celo, a blockchain startup that provides mobile services. Deutsche Telekom also provides staking services for Flow, Celo, and Polkadot.
StakeWise co-founder Kirill Kutakov added that the app was expecting a “strong demand and significantly increasing capital flows” following the merge.
T-Mobile, a subsidiary of Deutsche Telekom, last week joined forces with Nova Labs to launch Helium Mobile, a 5G wireless service that allows users to earn rewards in crypto tokens for sharing data.