A group of prominent cryptocurrency companies, including Alluvial, Blockdaemon, and Coinbase, announced the introduction of a new certification to improve the security and risk management of Ethereum node operators.
This certification, called the Node Operator Risk Standard (NORS), is designed to set a reliable benchmark for institutions interested in Ethereum staking, which is a critical process in the Ethereum network.
NORS is expected to become an essential tool for banks and large financial institutions looking to engage with Ethereum staking.
The Head of Blockchain Infrastructure at Galaxy Digital, Zane Glauber, described the introduction of NORS as “a significant step forward for the institutional adoption of Ethereum staking”.
He noted that the certification is designed to “simplify the due diligence process”, making it easier for these institutions to trust and engage with Ethereum staking providers.
The Chief Operating Officer at Alluvial, Evan Weiss, underscored the importance of clear security standards as more financial institutions enter public blockchain networks.
“By setting a robust, verifiable framework for validator risk management, institutions will finally be able to evaluate the quality of staking infrastructure on a level playing field”, Weiss said.
This framework allows institutions to assess the quality of staking infrastructure, giving them confidence that their investments are secure.
The new certification focuses on several critical areas of Ethereum staking. It aims to prevent slashing, a penalty that occurs when validators behave dishonestly or make mistakes.
NORS would also ensure diversity among validators and secure management of private keys, which are essential for accessing and protecting digital assets.
By establishing a unified, shared standard for evaluating the risks associated with validators, this NORS certification would position Ethereum staking favourably for wider institutional adoption, said the CEO of Blockdaemon, Konstantin Richter.
Addressing gaps in existing certifications
The NORS certification addresses a gap in the current landscape of certifications, which often do not cover the specific risks and requirements of Ethereum staking.
Clayton Menzel from Eigen Labs mentioned that it will “enhance trust and reliability across the entire staking ecosystem, including restaking”, a process that allows validators to earn additional rewards.
Eigen Labs contributed to NORS to ensure that restaking solutions were accurately included in the certification.
The Senior Product Manager at Figment, Joshua Faier, echoed this sentiment, noting that NORS could bridge the gap between existing certifications like SOC 2 and ISO 27001.
“NORS addresses the specific nuances of staking that other certifications don’t fully cover”, Faier explained.
The new certification is expected to meet the rigorous standards required by the Big Four accounting firms and align with widely recognized audit standards like SOC1.
Challenges and the future of ETH staking
Despite the introduction of NORS, some experts remain cautious about how quickly institutions will adopt Ethereum staking.
The CEO of Labrys, Lachlan Feeney, pointed out that while the amount of staked Ether continues to increase, institutional interest may still be limited.
“Other assets, like US Treasurys or Bitcoin, currently offer higher returns with potentially less risk”, Feeney observed.
He noted that Coinbase’s current annual yield on Ether staking is 2.06%, which is lower than what investors can earn from some US Treasurys.
The CEO of Launchnodes, Jaydeep Korde, added that many institutions are hesitant to get involved in Ethereum staking because they don’t fully understand the technology.
“Staking is a new frontier, and many institutional investors are still trying to grasp how it differs from traditional assets”, Korde said.
He also mentioned that managing the custody, or safekeeping, of digital assets remains a significant challenge for these institutions, making the process even more complex.
The NORS certification, therefore, aims to address these challenges by offering a trusted standard that shows node operators meet the necessary requirements for managing the risks of running Ethereum staking nodes.
This certification is expected to pave the way for broader institutional adoption by providing a clear and reliable benchmark for evaluating staking providers.
