Binance US, the American affiliate of the world’s largest crypto exchange, is now offering cryptocurrency staking services to its clients—a move that the company expects will make it more competitive against other U.S.-based rivals, such as Coinbase.
Staking services are now available to Binance US customers holding any of seven select proof-of-stake cryptocurrencies: Binance Coin (BNB), Solana (SOL), Avalanche (AVAX), Cosmos (ATOM), The Graph (GRT), Livepeer (LPT), and Audius (AUDIO). According to the company’s Twitter account, more options will be made available in the future.
Proof of stake is a consensus mechanism used by many blockchain networks that require users to lock up their coins for permission to validate the next block. When validating, these users typically earn a reward that is tied to the transaction fees collected from that block.
The more coins that users lock up, the better their chances are of validating a block and thus generating more rewards. However, many blockchains have minimum funding requirements, which means smaller holders need to pool their funds together if they want to earn rewards. Ethereum 2.0, for example, requires a minimum of 32 ETH (worth roughly $57,000 at the moment) to participate in staking.
Cryptocurrency exchanges have since emerged as one of the primary vehicles for users with less than the required minimum to participate in staking and earn rewards by joining a pool.
Binance US’s service, much like that of its competitors Coinbase and Gemini, allows anyone to stake, with varying rates depending on the cryptocurrency chosen. While the company promises 6.4% annualized returns on its native BNB token, for example, it offers 18% APY for staking for Livepeer—a decentralized live video streaming network.
These rates, however, are subject to change, according to “estimates that are calculated based on the average staking rewards accrued over the past 90 days,” the company said.
Staking on Binance US appears to lack a lock-up period, meaning stakers can unstake their coins at any time. It does, however, charge some commission for “facilitating all technical staking requirements.”
Want to be a crypto expert? Get the best of Decrypt straight to your inbox.
Get the biggest crypto news stories + weekly roundups and more!
Source: https://decrypt.co/102267/binance-us-high-yield-crypto-staking-solana-avalanche-more