Binance has one of the most loaded ecosystems in the crypto terrain. The platform has successfully established itself as a formidable force in various sectors through its knack for continuously expanding the scope of its operations. Unsurprisingly, Binance currently runs a staking portal that allows users to earn interest by merely holding cryptocurrencies on the platform. It is worth noting that this product has become one of the most revered staking platforms in the crypto space, and this has led us to feature it on our prestigious list of top crypto staking websites. In this review, we will identify the strength and flaws of this offering as well as separate hype from value.
What Are the Fundamental Workings of Binance Staking?
Binance has realized that crypto holders and investors are presently searching for new ways to earn more income or capitalizing on the benefits of cryptocurrency. And so, the platform has provided a plethora of staking options to its users that allow them to earn interest on their crypto holdings. All users have to do Is own a Binance account, deposit supported staking coins, and watch their holdings accrue interest all through a specified duration. You will agree that Binance has simplified staking by acting as an intermediary between users and blockchains networks with Proof of Staking consensus mechanisms and distributing staking rewards to participants. Besides, the platform has introduced three core iterations of staking offerings to capture the risk and liquidity appetite of various users.
How Many Ways Can Users Stake Coins?
There are three ways you can earn staking income on the Binance website. The first is what the platform calls Locked staking. The second is Flexible staking, while the last is DeFi staking. Unfortunately, you can only opt for one of these options at a time.
As its name implies, lock staking entails a lock-up period. In other words, Binance imposes conditions that state that users must hold assets in their cryptocurrency wallets for a specified timeframe to be eligible to earn interest. During the lock-up period, users who opt for early redemption by withdrawing the locked asset or using it to trade will forfeit the interest accrued on the principal coin. While this approach may seem rigid, users who opt for this system have exposure to staking options with high returns. At the time of writing, Binance’s locked staking products are limited to 7 cryptocurrencies. Each has its lock-up periods, the minimum locked amount, and the estimated annual yield. The coins supported on locked staking include XEM, IRIS, EOS, BAND, DASH, GXS, and ONE.
Flexible staking on Binance offers income earning features with none of the restrictions found on the Locked staking products. If you opt for flexible staking, you do not need to worry too much about the product’s minimum staking amount or a specified lock-up period. Instead, flexible staking only requires interested users to have a balance on their Binance wallets to earn interests. Therefore, you can withdraw your coin at any time without having to forfeit all the accrued rewards.
Likewise, these products provide the level of flexibility that allows users to trade with staked coins. However, whenever users trade with a fraction of their deposited coins, the platform automatically adjusts the staking balance, which will determine the rewards that you will earn from daily snapshots. Although Binance does not impose lock-up periods on its flexible staking products, it, nonetheless, sets a 24 hour wait period to deter users from manipulating the system.
Currently, there are 25 flexible staking products on Binance ranging from 1% estimated annual yield to up to 12% yearly interest. Some of the coins supported are EOS, LOOM, Lisk, Ark, ARPA, and KAVA. Remarkably, Binance does not charge any fees for its flexible staking program.
Apart from its locked and flexible variations, Binance also provides users with the opportunity of participating in DeFi mining. You will agree that this concept has emerged as one of the factors fueling the explosion of the prices of DeFi tokens. By expanding its staking platform to capture this exciting terrain, Binance has managed to diversify its offerings and cater to more users. While this is a given, the DeFi staking presently supports two DeFi mining programs. The first involves the staking of a minimum of 10 BNB to earn rewards while the other requires you to deposit a minimum of 100 DAI to start earning interests. The former has a staggering maximum estimated yield of 25%, and the latter generates as much as 12% interest per annum.
As you will expect, the higher the returns, the higher the risks. Hence, Binance warns that it is not liable for any loss incurred due to the security frailties of supported DeFI protocols.
What Are the Pros and Cons of Binance Staking?
The Pros of Binance Staking
It Is Very Straightforward
As always, Binance has simplified the process and enabled tools that give users access to the staking rewards of blockchain networks. It is worth mentioning that the simplicity of these offerings is one of the reasons why Binance is a top staking platform.
Some Binance Staking Products Do Not Have Lock-Up Periods
The flexibility of some of the products supported on Binance is remarkable because there are no lock-up periods imposed on interested users. Hence, you can withdraw staked balance or use a fraction to trade on the platform’s exchange interface.
It Supports DeFi Mining
There are mouthwatering opportunities embedded in the DeFi landscape. Thus, it is interesting that Binance staking is introducing DeFi mining to its buzzing community of crypto participants.
It Has A Wide Array of Options
As explained in this review, Binance has set up three different iterations of staking products, including flexible staking, locked staking, and DeFi mining. Having said that, each iteration comes with a list of staking products with different interest rates and conditions. The availability of a broad array of options exposes users to competitive staking opportunities.
The Cons of Binance
Flawed Security Track Record
It is impossible to objectively research Binance or any of its offerings without mentioning the security mishaps that tainted its reputation in 2019. It is safe to say that Binance is not immune to attacks. However, the exchange has shown that it has the policies in place to ensure that affected users are duly refunded for any loss incurred due to a security breach.