FalconX opens the Ethereum Staking Yield Trading market

FalconX, a prime broker of digital assets, has just executed its first Forward Rate Agreements (FRA) linked to the staking yield #Ethereum . The launch of this interest rate derivative product aims to provide institutions with a new tool to hedge against staking yield volatility.

These forward contracts reference the Treehouse Ethereum Staking Rate (TESR), a benchmark index published daily by the infrastructure provider Treehouse. TESR is part of Treehouse's “Decentralized Offered Rates” framework, designed to create indices equivalent to traditional financial benchmarks like Libor.

#FalconX indicates that the TESR FRA allows institutions to hedge or speculate on the profits from Ethereum staking – which has become the default yield of the network since its transition to Proof-of-Stake. Staking yields have fluctuated significantly this year, driving demand for interest rate risk management products from institutional investors.

The launch of this product comes amid a surge in demand for Ethereum staking, with billions of USD flowing into ETF funds and corporate treasuries. FalconX and Treehouse expect to expand the fixed-income layer of digital assets.

Initial traders include institutions such as Edge Capital and Mirana. FalconX emphasizes that this new market is “online and continuously accessible,” unlike previous trial trades. However, these instruments are currently not available to customers in the U.S.