The acquisition brings Alluvial Finance‘s engineering talent and expertise under the Galaxy umbrella, solidifying its commitment to providing comprehensive on-chain solutions for institutional clients. But what exactly is liquid staking, and why is Galaxy betting big on it?
Liquid staking solves a critical problem in the proof-of-stake (PoS) world: illiquidity. Traditionally, staking locks up your assets, preventing you from using them elsewhere in the DeFi ecosystem. Liquid staking unlocks that capital by providing a representative token for your staked assets. This token can then be used in other DeFi activities, such as lending, borrowing, or trading, all while still earning staking rewards.
Think of it like this: you deposit ETH and receive stETH in return. You earn staking rewards on the ETH, but you can also use the stETH to generate additional yield. This unlocks a world of possibilities for institutional investors who want to maximize their capital efficiency.
Liquid Collective: The Foundation
Alluvial Finance was previously the development company behind Liquid Collective, a secure and compliant liquid staking standard designed specifically for institutional use. This acquisition effectively brings the development of this crucial protocol in-house at Galaxy.
Liquid Collective emphasizes security, compliance, and operational efficiency, addressing key concerns for institutions looking to participate in staking activities. This makes Galaxy’s move a calculated step towards attracting more institutional capital into the DeFi space.
This acquisition isn’t happening in a vacuum. Galaxy has been steadily building its presence in the on-chain world. According to the company, its assets under stake as of September 30, 2025, were substantial, demonstrating a significant existing footprint in the staking market.
By integrating Alluvial’s expertise and the Liquid Collective protocol, Galaxy is poised to offer a more robust and comprehensive staking solution to its institutional clients. This includes:
- Enhanced security and compliance features
- Improved capital efficiency for staked assets
- Access to a wider range of DeFi opportunities
As with any strategic move in the rapidly evolving crypto landscape, there are inherent risks. Galaxy acknowledges this in its cautionary statement regarding forward-looking statements, available on the SEC website at www.sec.gov/edgar. Factors such as regulatory changes, technological challenges, and market volatility could impact the success of this acquisition.
These risks include, but are not limited to:
- Risks related to blockchain infrastructure and staking business;
- any delay or failure in successfully integrating the acquired company;
- changes in applicable laws or regulations;
- the possibility that the Company may be adversely affected business, and/or competitive factors;
- changes or events that impact the cryptocurrency and AI/HPC industry, including potential regulation, that are out of our control;
- the risk that our business will not grow in line with our expectations or continue on its current trajectory;
- the possibility that our addressable market is smaller than we have anticipated and/or that we may not gain share of it;
- any delay or failure to consummate the business mandates or achieve its business pipeline goals;
- liquidity or economic conditions impacting our business;
- technological challenges, cyber incidents or exploits.
Despite these risks, Galaxy’s move into liquid staking is a strong indicator of the growing institutional interest in DeFi. By providing a secure and compliant gateway to the world of staked assets, Galaxy is positioning itself as a key player in the future of finance.
