Goldman Sachs Group Inc. GS participated in the $28 million Series A funding round of Blockdaemon — a company that provides crypto staking and blockchain node management infrastructure.
What Happened: According to a Wednesday The Block report, Blockdaemon's funding round was led by Greenspring Associates, with participation from Goldman Sachs, BlockFi, Voyager Digital, Uphold, and others.
This round pushes the enterprise's total funding to date to about $40 million.
Goldman Sachs invested $5 million in the company and will join it as a "board observer," according to the firm's founder and CEO Konstantin Richter.
Why It Matters: This investment follows last month's reports that the bank also led a $15 million Series B investment round in cryptocurrency data provider Coin Metrics.
Richter also told The Block that Blockdaemon plans to use the newly–raised capital to double its headcount to 100, focusing on hiring engineers in the first place.
The platform, founded during the 2017's crypto boom, reportedly saw significant demand during the recent crypto renaissance and, according to its founder, now has over 100 institutional clients, including crypto natives and traditional financial services firms.
Blockdaemon's customers leverage the company's infrastructure to stack cryptocurrencies to let their end users earn interest on their digital assets.
The crypto staking platform purportedly has over 10,000 nodes across 40 blockchain networks and global regions.
What It Means: Cryptocurrency staking is a process in which digital asset holders lock their crypto in network nodes that help maintain a proof-of-stake (PoS) blockchain in exchange for an interest on those funds.
PoS blockchains secure themselves by having coin holders put their digital assets at stake through a process called staking and accepting that if they misbehave by approving unfair transactions they will lose their assets to "slashing."
Read also: Will Ethereum Recover Stronger Than Bitcoin? Goldman Sachs Thinks So
Since those assets have to be held in infrastructure connected to the internet, it is potentially vulnerable to cyberattacks by malicious hackers.
For this very reason, large holders often rely on specialized firms such as Blockdaemon to manage their staking while trying to ensure the highest-possible cybersecurity standards.
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