Just a few months ago, Binance staking launched its first "High Yield Staking Offer" which was a promotion that gave crypto enthusiasts the chance to earn up to 37.49% APY by staking ADA, DOT, TRX, EOS, and CAKE.
The staking event usually runs on a first come first served basis. Such events highlight multiple opportunities for staking available on Binance.
But what exactly is crypto staking? Let us walk you through the whole concept!
What is Crypto Staking?
In many ways, staking your crypto with a specific Proof of Stake mechanism is the equivalent of PoW mining as it contributes to the security and operations of that network.
However, unlike mining, staking is less resource-intensive as all that is required is for you to lock your cryptocurrencies in a staking wallet while you receive rewards in return.
Staking works with proof of stake blockchain networks that rely on validators who lock their coins to get a chance of being randomly selected to validate new blocks on the blockchain. If you do not have enough coins to stake as a validator, you can stake your coins with a renowned validator similar to how you can lock your coins in a liquidity pool. Therefore, the rewards that validators receive from finding blocks to mine are shared in proportion to every member's contribution.
The process is way simpler than mining on the PoW network as most staking options allow you to simply stake from your wallet or you can even stake your coins straight from the exchange wallet, as is the case with Binance.
Binance offers a plethora of coins that you can stake for varying APY percentages, thus allowing you more freedom and access to the lucrative side of crypto staking.
Types of Staking on Binance
Binance offers several ways to stake your cryptocurrency. Here is a breakdown:
DeFi Staking On Binance
DeFi staking can be risky, and for this reason, Binance vets their DeFi staking partners to minimize risks to their customers. However, while DeFi staking on Binance features high APYs, there is still risk involved as Binance is not responsible for any on-chain smart contract security issues.
This feature on Binance exchange allows you to earn rewards for staking a specific cryptocurrency for a specific duration. For instance, a coin such as BEL might offer a 15 day staking period with an annualized interest rate of, say, 18%. Activities staking opportunities do not last forever therefore once those 15 days are over, the staking process ends. You can check the activities section on Binance as these offers vary from month to month.
ETH 2.0 Staking on Binance
You can stake your Ethereum for a long term and earn rewards with the ETH2.0 staking feature on Binance. The process is simple: select “More” on the Binance mobile app and scroll down to “Finance.” Since you are staking ETH on the Binance Smart Chain network, your ETH will be converted to Beacon ETH (BETH) which is a tokenized asset representing your Ethereum stake. BETH can do everything that ETH can do and you can swap your BETH for ETH with an equal proportion. The interest rate you earn from staking your ETH on the ETH2.0 staking feature will vary based on the number of people staking at the time.
Locked Savings In Binance
You can lock your funds on Binance for a varying interest rate based on the number of days your funds remain locked on the exchange. For instance, you can lock your funds in the form of BUSD, USDC, or USDT for 7 days for a 4.5% AIR, or 90 days for a 5.1%.
You can lock your BNB and earn an APY by simply going to the BNB vault section of the exchange. The APY is determined by the existing earning opportunities on the platform. At its core, the Binance Vault operates more like a yield optimizer that takes your funds and invests them in places that offer a guaranteed yield such as the launch pool or flexible saving.
Through Binance Launchpad, the exchange pioneered Initial Exchange Offering (IEO) mechanism, where crypto-startups generate capital through an exchange. The Binance Launchpad features several projects from time to time to allow its users to stake their coins in order to earn rewards. The list of projects available for staking is constantly changing.
Why Is Binance Banned in the US?
Binance has been repeatedly in trouble with financial regulators worldwide due to its aggressive approach to listing new tokens and NFTs for trading, Binance has grown quickly and outpaced rivals like Coinbase. However, the United States Commodity Futures Trading Commission has been scrutinizing Binance for alleged insider trading. Furthermore, the Justice Department and the IRS have been looking into Binance’s role in money laundering and tax evasion.
Binance does operate in the United States under its Binance.US arm, a slimmed-down version of its main exchange.
Staking on Binance US
Although staking on Binance US is available, only a selected few cryptocurrencies are eligible. The regular Binance exchange offers over 100 different cryptocurrencies for staking, but Binance US only offers four: Vechain, Tezos, Cosmos, and Algorand. That is due to US regulation, which prohibits Binance from listing most cryptocurrencies for staking.
In A Nutshell
The feature of staking on Binance comes with a wide range of opportunities. Users can analyze all the options available on the platform and the level of risks associated with them. The ones with high APYs usually come with high risks while the ones with low percentage of interest are low-risk investment options. Where flexible saving options offer rewards on a daily basis, however with a low rate of return, locked savings reward users after the expiration of the term with a higher rate of return.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap. CoinMarketCap is not responsible for the success or authenticity of any project, we aim to act as a neutral informational resource for end-users.