Binance Earn: What is it, risks, how it works and more
- Binance Earn works like traditional savings accounts.
- Different cryptocurrencies can be used with this service.
- The Binance platform assures us of the return of interest and the liquidity of our savings deposit if we wish to cancel it.
What you should know about Binance Earn
Being able to live without having to worry about our economy is one of the most popular dreams of this century. People try to find methods that make us spend as little time as possible trying to get money to be able to spend as much time in freedom.
In the early 2010s, cryptocurrencies began to be talked about. Broadly speaking, we can describe them as virtual assets that use cryptographic encryption to ensure their ownership and the security of transactions.
As its own description indicates, these coins are not tangible, that is, they do not exist in the real world. That is why they are stored virtually. To operate and make transactions with the greatest security, we must go to the cryptocurrency markets. One of them and the most famous is Binance. Next, we will tell you about one of its services, Binance Earn.
What is BinanceEarn?
Binance Earn is a service offered by the Binance cryptocurrency exchange. Well, what service does it offer us? In order to explain it, we left the virtual world for a moment and moved to the real banks. Surely they will have offered us more than once to get us 'savings plans or accounts'.
Basically, they consist of depositing money in an account and, depending on the interest per year that they have offered you, the amount will grow.
The rest of the conditions depend on the banks: there are some that do not let you withdraw the money until after a while, others that are more flexible, others in which the interest is fixed and others variable.
It could be said that Binance Earn has been a savings account service from the Binance company, but dedicated to cryptocurrencies. There are different types in this service that can benefit us. We will see them later.
How does Binance Earn work?
It works like any other savings banking system. We deposit an amount, in this case of cryptocurrencies, and depending on the type of savings that we have chosen, we will have one type of return or another.
The money is generated through lending , that is, our cryptocurrencies and those of other savers will be lent to investors or traders who will return the money with an interest rate. This interest is what ends up being paid to lenders in the form of cryptocurrencies: Ethereum, Binance USD or Bitcoin , among others.
Is there risk with Binance Earn?
Binance affirms that there is no risk, since whatever operations the traders do , the money we have deposited will always be returned plus the promised interest.
Binance has shown a serious and compromising attitude towards risk. For example, in 2019, 7,000 Bitcoins (40 million USD at the time) were hacked. The company investigated the altercation and fully refunded the money to anyone who lost it as a result of the hack.
What are cryptocurrencies and which ones are supported by Binance Earn?
Cryptocurrencies are virtual currencies that we can use to pay. Although many people use it as a means of transaction, there is a large number who see it as an investment in the future. Many wait for the currency they own to increase in value due to various market movements. In this way, the more people do not sell ( HODL ) and the more investors of a virtual currency, the higher the price. It is the law of supply and demand.
Thanks to its flexibility and the non-intervention of traditional financial sectors in its transactions, cryptocurrencies have become very popular. That is why there are various virtual currencies, each one born based on an initial project.
Some of the best known are Bitcoin, Ethereum, Litecoin, Cardano and Binance Coin BNB. The Binance virtual bank offers us the possibility of using a large number of cryptocurrencies compatible with its service, which makes it a very versatile service.
Binance Earn Categories
Binance offers different types of savings investment. Although we could generally divide it into fixed term and flexible term investment, there are various details that make each one different from the other even if they may seem to be in the same category. Here we leave you a table with the available categories and below we explain each of them:
Flexible savings
This category refers to flexible savings. This means that the interest generated through our savings can be withdrawn at any time. However, one of its drawbacks is that once subscribed to this plan, the deposited funds cannot be withdrawn until the next day and the payment interest will proceed in the same way.
In the same way, when we want to withdraw the funds, it will ask us to wait until the next day. The interests will have been generated then and our cryptocurrencies can be withdrawn. Unlike fixed deposits, flexible deposits have a much lower interest rate, since they can be withdrawn at any time.
Fixed savings
In this case, we will deposit our money for a certain period of time, which can range from 7 to 90 days. In addition, the interest rate is not like in flexible deposits that vary by day, but is fixed. One of the advantages of this category is the increase in the percentage that we will earn thanks to interest, which is higher than in the flexible type.
Lending
Lending services are similar to what Binance does with savings . However, this way we can do it manually and see who we want to leave our cryptocurrencies to. As a differentiating novelty from the previous categories, lending appears as an event and not as something fixed. In other words, we must be vigilant as they appear during the day with the required information.
It will be us, therefore, who will also decide if the interest rate that the investor has in mind interests us or not. This method needs more effort than the previous ones. However, it is possible to receive more interest from some traders. Even more than with fixed savings!
Locked stacking
In this category we will talk about a slightly more advanced concept of coin mining: the proof of stake or, in Spanish, proof of participation.
Proof of stake (PoS): It emerged from the proof of work (PoW) . In this form of mining (PoW), the miner with the most equipment and the longest mining time is the one who would take the most cryptocurrencies. However, it requires tremendous energy expenditure, especially if renewable energies are not used during practice, and could result in some risk of centralization.
As a result, the alternative emerged: PoS. In this case, those users who have more cryptocurrencies and who have participated more in the network will have more possibilities of taking blocks from the blockchain network.. The clear advantage is the low rate of electricity consumption and the lower barrier to entry for cryptocurrency mining (you don't need a supercomputer).
Once the PoS has been explained, we will better understand this category and its function. To earn money, therefore, all we have to do is participate in a PoS network for 7 to 90 days. It should be said that we will not be able to use these coins during this time. However, there are other cryptocurrencies that do allow us to make flexible use during a staking .
Launchpool
This category is fully linked with the Binance Launchpad new coin launch platform. Promising projects and currencies are posted on this platform. The launchpool will consist of staking our coins in exchange for obtaining the new coins where we have left our currencies.
In simple words, you will be able to earn new currencies basically by leaving some cryptocurrencies subscribed. On the other hand, we can withdraw both our old and new coins at any time.
BNB Vault
It is the so-called Binance Vault. It is one of the automated services that can give you the best return on investment. Once the launchpool concept is understood , what this type of service does is stake new cryptocurrencies with the balance that you have allowed. In other words, it will be the machine that is attentive to new markets and you will not have to spend hours in front of the computer.
It is a good option if we do not want to spend several hours a day paying attention to the computer.
However, on the negative side, you will only get a part of the coins: after all, the work is done by Binance. In addition, it will also give us a small annual percentage in Binance currency, known as BNB. In order to withdraw our investment we can do it in two ways:
- Standard redemption: We will withdraw the money the day after the request and we will receive the interest of this day.
- Fast redemption: We will withdraw the money at the same time of the request and we will not receive interest on this day.
New: ETH 2.0 staking
You can stake your Ethereum for the long term and earn rewards with the ETH 2.0 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 into Beacon ETH (BETH), which is a tokenized asset that represents your stake in Ethereum.
BETH can do everything that ETH can do, and you can exchange your BETH for ETH with an equal ratio. The interest rate you earn when staking your ETH on the ETH 2.0 staking feature will vary based on the number of people staking at the time.
Conclusion
Throughout this article we have seen how there are various options to be able to grow our virtual currencies in the digital market. We have learned that the interest benefit in a cryptocurrency savings account is much higher than in a conventional bank account.
However, they have in common the relationship of interest between fixed-term and flexible savings: you earn more with the former than with the latter.
Still, flexible term savings accounts are desirable if we don't know how much our currency will be worth in 30, 40, or 90 days. The risk is that it could be devalued and we should sell as soon as possible.
Although the cryptocurrency market is relatively new and current, Binance Earn savings accounts offer us a full return with our earnings no matter what. And it is that this company is a leader in virtual currency exchanges.
So you must always maintain seriousness and commitment to your customers. In addition, a point in favor is the versatility that this service has of being able to allow us to make transactions with several currencies.
And so far our article on Binance Earn. If you liked it, do not hesitate to leave us a comment about what you found most interesting.
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