Figment Partners with OpenTrade and Crypto.com to Launch Institutional Stablecoin Staking Product

Summary:
Figment has teamed up with OpenTrade to introduce a new stablecoin yield product aimed at institutional clients, with custodial support from Crypto.com. This innovative offering targets an annual return of around 15% on stablecoins by using a combination of staking rewards and a hedging strategy to minimize price volatility.

Key Takeaways

Figment has launched a new stablecoin yield product in partnership with OpenTrade.
The product targets an annual return of approximately 15% based on historical performance.
Custodianship is provided by Crypto.com, ensuring secure asset handling.
The yield mechanism utilizes Solana staking rewards paired with a perpetual futures strategy to stabilize returns.
This offering addresses rising institutional demand for secure yield products outside traditional crypto lending.

What Is Restaking

New Approach to Stablecoin Yield

Figment, which manages $18 billion in assets under stake, announced its collaboration with OpenTrade to offer a new stablecoin yield product specifically designed for institutional clients. This offering, officially named OpenTrade Stablecoin Staking Yield Powered by Figment, is marketed as a safer alternative to traditional decentralized finance (DeFi) lending markets. These markets have received criticism for their counterparty risks and vulnerabilities related to smart contracts.

The partnership introduces a unique mechanism that combines staking rewards with a hedging strategy to help minimize price volatility.

Innovative Yield Structure

The yield mechanism is anchored on Solana staking rewards earned from a dedicated Figment validator. The staking rewards are complemented by a perpetual futures strategy managed by OpenTrade, which helps to neutralize exposure to fluctuations in SOL's price.

According to both organizations, this innovative structure has historically been able to provide returns that are more than twice the standard staking rate of 6.5–7.5% offered by Solana while still allowing for liquidity in deposits and withdrawals.

Crypto.com serves as the custodian for the assets, ensuring they are kept in fully segregated accounts that are legally secured for investors and separated from the exchange's operational funds. Institutional clients can conveniently deposit or withdraw stablecoins using Figment's application or APIs, with interest accruing immediately and no lockup periods involved.

Rising Demand for Stablecoin Yield Offerings

The launch of this product comes against the backdrop of increasing demand for yield offerings based on stablecoins, especially from exchanges, wallet providers, fintech companies, and other digital asset firms seeking revenue opportunities beyond traditional crypto lending. These market players are on the lookout for alternatives that mitigate exposure to unsecured lending, liquidity pool impermanence loss, and the complexities of opaque DeFi structures.

"Stablecoin Staking Yield is the result of our commitment to provide higher returns while ensuring stronger protections," shared Jeff Handler, Co-Founder and Chief Commercial Officer at OpenTrade. He elaborated that this product merges staking and derivatives hedging into an attractive yield option not commonly found in existing real-world asset (RWA) or DeFi strategies.

Karl Turner, a director at Crypto.com, mentioned that the exchange's infrastructure is crafted to adapt to the evolving needs of institutional digital asset clients. “We are proud to support Figment in facilitating a stablecoin staking offering that our clients are actively seeking,” he stated.

Emphasis on Institutional Security

Figment, which delivers staking services to various asset managers, custodians, exchanges, and large token holders, has emphasized that this new product aligns perfectly with its security-first approach in validator operations. "We’re bringing our infrastructure and security mindset into the realm of stablecoins," noted Andy Cronk, Co-founder and Chief Product Officer at Figment.

Both companies have indicated that the predicted 15% Annual Percentage Rate (APR) returns are subject to market fluctuations. Figment has explicitly stated that it does not control or guarantee yield rates, which are determined by OpenTrade’s staking and hedging methods.

Previous Ventures: Ethereum and Solana ETPs

In another recent development, Figment Europe Ltd and Apex Group launched two new exchange-traded products (ETPs) on the SIX Swiss Exchange. These ETPs, issued in partnership with Issuance.Swiss AG, enable access to staking rewards through traditional brokers or banks, providing conservative institutions a way to invest in this asset class via ETPs.