Blockdaemon is a blockchain infrastructure start-up that develops and manages nodes for institutional clients to stake assets. Founder and CEO Konstantin Richter speaks with Acuris Capital Intelligence about his company’s business model, growth plan, and why crypto asset volatility could be a good sign for investors.

By Calvin Trice

Q. What service does Blockdaemon provide to crypto asset investors?

Let’s say you buy a bitcoin or a fraction of a bitcoin on your Robinhood account. What really happens is Robinhood needs to send the transaction to a node to make sure that your transaction is added to the [globally distributed] ledger, which is the only way you know you ultimately own the token. You want it to be working all the time, and they [clients] have to make a choice to scale up an engineering team of people or to outsource it.

Q. Who is your target customer?

Anyone who has or allows their customers to hold crypto assets. It’s the exchanges—the Krakens, the Binances, the Coinbases. It’s custodians, which are the wallet companies. Then you have the PayPals and Robinhoods and E-Trades. Anyone who allows anyone to purchase bitcoin or ethereum or any other tokens is a potential customer.

Q. You say acquisitions are core to your growth strategy—what do you look for in M&A?

We’re trying to build a platform that legacy financial institutions will require to work efficiently with digital currencies. This is not something that they know they want yet, and there are very complicated components involved. We have successfully acquired companies in the past to fill out gaps in our own product offering, and we’ll continue to do so to really offer a complete node stack for our institutional customers.

For us, it’s very strategic. We look mostly for companies that have products which can plug right into our solution suite with strong engineering cores. We’re always intrigued by the novel ways you can monetize crypto networks.

Q. What are the trends to keep an eye on in the crypto sector in the next few years?

It’s still going to be really volatile. We’ve seen that crypto prices and equity prices seem to be closely correlated. Traditional entities will be volatile and crypto will be volatile. From my side, crypto volatility is a good sign. It shows that we’re disrupting the market. I expect a lot of that but I think we’re very early in the first stages with just a 5% adoption rate.

A bit of background: Founded in 2017, Blockdaemon is based in San Francisco. The company raised US$400 million through April on its way to a US$3.25 billion valuation before the downturn in equity and crypto markets. The company has launched more than 40,000 nodes and averaged more than US$10 billion in monthly staked assets.

This interview has been edited for length and clarity.