We have now entered the age of proof-of-stake. The successful Ethereum merge served as a catalyst for the blockchain industry to switch from the legacy proof-of-work to the highly efficient, secure, and decentralized proof-of-stake consensus mechanism. This shift has been prompted by the limitations of proof-of-work such as the required energy consumption which proof-of-stake ameliorates.
The move to proof-of-stake is greatly accelerating institutional adoption with many large players looking to increase their participation in the space, and specifically staking. However, the market is currently lacking the right products with proper operational security and onboarding to welcome large-scale adoption to staking.
This is the exact reason that COSIMO-Y was introduced – as a solution to the obstacles preventing institutional adoption.
Doubts Surrounding the Adoption of Proof-of-Stake
One of the key concerns regarding proof-of-stake is security, however, this worry has been mostly invalidated. Seeing as the validators in the proof-of-stake mechanism stand to lose their own assets, they are much more likely to act in good faith, and also combat any dishonest validators.
Even though there is always a risk of security processes being outmaneuvered, credible platforms have sufficient security mechanisms in place to ensure that this won’t happen easily. As such, a 51% attack is exceptionally unlikely and could only be accomplished if an aggressor has billions worth of crypto assets, and even in this unlikely scenario, with proof-of-stake, the community at large would be able to combat the attack. Ultimately, the diversity of validators means that cyberattacks have a very small chance of succeeding.
A Shift In Values
In the hype of the bull market, there was a loss of touch with the values of crypto and web3 – the self-sovereignty and decentralized solutions which were so intriguing. For many, there has been a disillusionment of the potential of cryptocurrency, and a mistrust of those who form a part of the industry. However, the industry appears to be reconnecting with its values, such as transparency, self-sovereignty, and decentralization.
Another important aspect to consider is the recent focus on eco-sustainability. Proof-of-stake allows investors and institutions to be a part of the solution to the current energy crisis. This is in response to the growing concerns and criticism lodged against the cryptocurrency industry for the environmental impact that “mining” has had.
According to the SCL Sustainability and ESG group, proof-of-stake uses up to 99% less energy than its proof-of-work counterpart. This massive degree of change has had a significant impact on the views surrounding the industry as a whole, and will have a tremendous impact on the acceleration of institutional adoption.
COSIMO-Y: The Staking Solution for Institutions
In order to combat this, COSIMO-Y was created as a risk-managed digital yield fund that participates in staking operations across top proof-of-stake protocols while attempting to protect downside risk. The platform has a diligently crafted tech stack with diversified custodians, staking providers, and exchanges. All of this means that the platform is ultimately diversifying risk across top solutions in the industry.
COSIMO-Y provides a turnkey solution with an institutional grade platform supported by key partners across the digital assets space. This risk-managed staking product is positioned to easily onboard institutions at scale, all while enabling institutions to invest at their desired risk profile. In staking, the counterparty is the blockchain which significantly reduces counterparty risk compared to other yield-generating activities.
COSIMO-Y offers not only institutions, but also individual investors, the chance to be a part of supporting blockchain networks without being at the mercy of industry erraticism. Through hedged protection, investors and institutions are offered limited losses, but are still able to see the benefits of the tokens they get through staking in the long-term. It’s true that not every investor nor every institution has the expertise or time to be able to keep up with the constant changes in the cryptocurrency industry. That’s why COSIMO-Y provides fund managers who do have the required knowledge, and who are able to identify the best way to ensure that clients engage and benefit from the market according to their own risk profile.
Final Take
Crypto is here to stay, and has emerged as a prominent form of investment. The risk that used to be inherent to the endeavor has also been minimized, and it is now easier than ever to diversify your portfolio through a COSIMO-Y risk-managed investment, designed by COSIMO Ventures.
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