Crypto startup Kiln, a firm that allows users to receive rewards for securing the Ethereum blockchain, today announced that it has raised $17 million in new funding to expand its operations led by early-stage investment firm 1kx.

The funding round was joined also joined by IOSG, Wintermute Ventures, KXVG, LBank and the cryptocurrency trading platform Crypto.com. Following the company’s latest funding round of $17.7 million in November 2022, Kiln has raised a total of $35 million.

Kiln’s service provides users the ability to “stake” crypto on blockchain networks, which is where holders of cryptocurrency tokens can lock them up to show that they have a stake in the security of the blockchain. By joining forces with other stakers, they participate in validating transactions and keep the network safe from bad actors, making it difficult to tamper with. As a reward for their commitment, users earn payouts in new tokens based on the amount that they staked.

“This round of funding fuels our global expansion and new products,” said Laslo Szabo, co-founder and chief executive of Kiln. He stated that the company plans to open its first office outside of Europe by expanding into Singapore. “We are looking forward to serving new and existing customers in the region more effectively, with a team of veteran Kilners in addition to new local talent.”

Kiln’s technology allows customers to launch validation for and provide staking services on more than 30 different blockchains, including Ethereum, Aptos, Fantom, Tezos and Solana. The company claims that it has staked more than $4 billion worth of tokens through its services and its share of staked Ethereum has reached 4% of the total on the blockchain, which underpins the second-largest cryptocurrency by market cap at more than $303 billion.

Szabo said that the funding will also drive a product expansion into multiple areas including what the company calls validator nonfungible tokens and the development of products that monetize using stablecoin rewards.

Validator NFTs allow for the tokenization of Ethereum-dedicated validators through cryptocurrency tokens that represent the ownership and withdrawal credentials of a specific validator. This would allow the holders of the NFT to buy, sell and trade the ownership of that validator without having to stake or unstake the Ethereum attached to it.

Szabo said that this has gained increasing interest with the preparation and launch of exchange-traded funds. Recently the U.S. Securities and Exchange Commission approved proposals for 11 spot bitcoin ETFs. This led to the speculation that more ETFs might be sought for other cryptocurrencies, including those on blockchains that allow for staking – notably the Bitcoin blockchain does not provide staking rewards.

Stablecoins are a type of cryptocurrency that maintains a one-to-one parity with another currency, such as the U.S. dollar, so that one token remains at $1. As a result, allowing integration partners such as cryptocurrency wallets, exchanges and custodians to monetize rewards as stablecoins would make it simpler for users to withdraw their rewards without worrying about volatility.

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