Survey technology provider Kiln raises $17 million in rare cryptocurrency funding round

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2023 has not been the best year for cryptocurrency companies. According to PitchBook data, venture capital investments in cryptocurrency companies fell by 68% in 2023 compared to 2022. To be fair, cryptocurrency companies still raised $9.5 billion. But this is a small number compared to 2022, the year in which cryptocurrency companies raised $30 billion.

However, some startups perform better than others. French cryptocurrency startup Kiln just closed a $17 million funding round in December 2023. 1kx is leading the round with Crypto.com, IOSG, Wintermute Ventures, KXVC, and LBank also participating. Some existing investors have also put more money into the company.

Even if you are familiar with the big names in the cryptocurrency space, you may not be familiar with Kiln as the company has focused on white-label, infrastructure-focused products. Companies like Ledger, Crypto.com, and Coinbase rely on Kiln's technology for their pooled staking services in their non-custodial wallets (Coinbase Wallet, Ledger Live, etc.).

As a reminder, staking consists of locking crypto assets in the blockchain to secure the blockchain and its transactions. There are financial incentives when you stake assets as you earn rewards over time.

Many proof-of-stake blockchains allow their users to own crypto assets, such as Polygon, Solana, and Avalanche. But the largest proof-of-stake blockchain ever is Ethereum, which switched to this mechanism in September 2022.

In this ecosystem, Kiln provides a set of smart contracts that facilitate the staking process. Essentially, Kiln programmatically manages the staking process through these on-chain contracts. With a simple transaction, users participate in Kiln's staking pools and start earning rewards. Kiln and its partners also receive a commission, which is also handled automatically through the smart contract.

It has been doing very well as the company currently manages 1,168,288 ETH. At today's exchange rate, this represents approximately $3 billion in ETH assets under management. Over the past year, Kiln has increased its 'share under management' by 5x.

The largest operator of Ethereum validation nodes

In addition to these on-chain products, Kiln has software development kits (SDKs) and application programming interfaces (APIs) to facilitate integrations with its storage clusters. It also operates a large network of auditors. On the Ethereum blockchain, Kiln is currently the largest validator node operator with just over 4% market share according to estimated data.

“Running our own validator nodes is a way to ensure the highest level of security while optimizing for higher financial performance. It also helps when it comes to improving monitoring. Finally, this hands-on approach helps us emerge as a legitimate company with strategic partners like the Ethereum Foundation, who share our best practices and strategy.” Anti-cut,” Mary Siegrist, Kiln's head of marketing, told me.

There are several ways to provide staking or “pseudo-storage”. For example, many centralized exchanges like Coinbase and Binance offer staking rewards. Behind the scenes, these centralized exchanges manage crypto assets for you. There are also liquid staking protocols like Lido, which provides a different token to represent staked ETH.

But if you want to integrate one-click staking into a non-custodial wallet, Kiln seems to be a good provider of white label technology. It's a low-level approach to staking, and some companies even ask Kiln to run their own custom validators.

“Today’s news demonstrates our commitment to growing our enterprise-grade staking platform, and we are thrilled to be joined by leading digital asset investors who are ready to help us achieve our goals. . . . We have an exciting lineup,” Laszlo Szabó, co-founder and CEO of Kiln, said in a statement. of upcoming products and expansion plans, including setting up an office in Singapore.”

Kiln has raised a total of $35 million since its inception. The company earns a commission on bonuses, which means that the company's revenue will grow in parallel with its total assets under management.