Understanding how staking works on Binance


Types of staking on Binance

For the average user, staking is like a bank investment. You transfer funds to the account, keep them, and they bring you passive income. It is logical that the more crypto a person puts into the account, the greater the profit will be.

In addition to this basic scheme of functioning, there are special conditions in the staking of some blockchains. But let’s take a look at the most popular staking options provided by the Binance exchange.

  • Fixed staking. It is also called Locked Staking. This option requires the user to set the term for investing the cryptocurrency.

The owner of the cryptocurrency can choose the term that is convenient him, but then it cannot be changed. For example, if the deadline was 50 days, and after 22 days you decide to withdraw the deposit, then all the previously accrued rewards will simply be taken away from you, after 10 – too. Only later days, when the contract ends, the deposit will be transferred to the balance of the wallet.

Staking of this type allows you to receive a fixed income. Such contracts usually have a higher interest rate, so this option is chosen by users who want to get the maximum profit.

  • Perpetual staking. The English name is Flexible Staking. By staking cryptocurrencies in this way, you do not have an end date for holding coins.
  • Users may stop participating in validation, at any time. The interest will be transferred until the blockchain participant withdraws his cryptocurrency or sells the crypto.

    Most often, earnings first come after hours from the date of the conclusion of the perpetual contract.

    Staking of the perpetual type is suitable for lovers of a certain freedom. If a participant does not like that his assets will be frozen and he wants to flexibly manage his invested cryptocurrency, he will like flexible perpetual staking more than usual. Cryptocurrency stored in such storage brings passive profit, and it is easy to withdraw it from the account at any time.

    • DeFi staking. Here we are talking about working with decentralized finance. These are a variety of services that operate on the basis of distributed registries. They have the functions of issuing loans, insurance and forecasting. But there are more rare functions.
    DeFi staking. Screenshot: Binance

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The basis of DeFi projects are smart contracts. They are well suited for such purposes, as they allow transactions to be automatically executed if their conditions match the pre-set ones.

DeFi staking is different from the usual. It involves third parties. Their role can be performed by projects or individual users. They take the owner’s cryptocurrency at a certain percentage. It turns out that this is an ordinary loan.

The system works in such a way that it is very easy to control transactions. But still, you will have to check the degree of effectiveness of individual contracts.

Staking in DeFi has interesting features:

Fast withdrawal of money. You can withdraw funds invested in staking after hours. Of course, the payment itself will have to wait a whole month.

Increased profitability

. DeFi staking yields higher returns, and you can start with less. Earn more with classic PoS staking 10% per annum is already a problem. But the option with DeFi allows you to earn more than 22% per annum and even more. But the final result depends on the cryptocurrency and its staking period.

Guaranteed Payouts

. A good example is presented in Binance BNB Staking. There, users are protected from scams not only by smart contracts, but also by the reputation of the Binance site itself.

Staking and 2022 remains a rather interesting way to make money on cryptocurrencies. It allows you to make good money and the risks associated with it are insignificant.

If we judge the profitability in general, the final result depends on the chosen cryptocurrency and the period of storage of coins in the staking wallet. Profitability is different – some users may have less, others more.

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