US customers of Binance now have an opportunity to go into staking seven popular cryptocurrencies. A bold move to make competition with Coinbase even more sharp.
Binance US, the American affiliate of the world’s largest crypto exchange, is now offering cryptocurrency staking services to its clients. This a move allows Binance to become more competitive against other U.S.-based rivals, such as Coinbase. And look more powerful amid the legal concerns that arise around Binance lately.
How does Binance staking work?
So just to remind you, proof of stake is a consensus mechanism for 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.
Binance US customers can now use staking with any of seven select proof-of-stake cryptocurrencies.
Those are 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.
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.
Take a look at Ethereum 2.0, which is all up for the Merge in the next month.
It requires a minimum of 32 ETH (worth roughly $57,000 at the moment) to participate in staking.
What about competitors?
Cryptocurrency exchanges are helpful for users with less than the required minimum to participate in staking. You can simply use crypto exchange such as Binance to join staking pool and get rewards.
Binance US’s service, much like that of its competitors Coinbase and Gemini, allows anyone to stake.
Rate vary depending on the cryptocurrency chosen.
Binance promises 6.4% annualized returns on its native BNB token. But you can earn significantly more if you join Binance staking for for Livepeer—a decentralized live video streaming network. Then it gets as high as 18% APY.
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.
Source: Binance US via Twitter