How to stake crypto on Binance
Staking is the practice of locking up your funds for a defined term and earning interest for doing so. The platform your stake your funds on will use them for trading or other purposes, and that’s where the interest comes from.
Staking is offered by numerous crypto exchanges and wallets; today, we’re going to focus on Binance staking.
Before you start
Before you learn how to stake crypto on Binance, there’s a few things you should keep in mind. First and foremost, it’s worth taking into account that not all cryptos can be staked. The exact list and interest rates will vary from platform to platform.
Next, mind that the interest from staking is most often shown in APY — short for Annual Percentage Yield; whenever you see an APY number, make sure to divide it by 12 to see how much you’d make in a month, then by another 30 to get the daily picture, etc. Mind that crypto staking APY, unless somehow fixed by the platform, is subject to change over time, along with the rest of the market.
Another thing is that when staking cryptocurrencies, you’re always at the risk of impermanent loss. The price of a coin you stake might explode during your staking term, making the whole staking initiative financially unjustified. Make sure to carefully assess and DYOR (Do Your Own Research) on the coins before actually staking them.
Alrighty, let’s begin!
How to start
To access the staking menu, press “Earn” in the top menu of the main page, and there press the Staking button.
Before you proceed, note that to stake a coin on Binance, you first need to hold it on your Spot account. You can learn how to buy crypto on Binance in this article here.
After staking cryptocurrency, it will be transferred from your Spot account to your Eran account, and all further interactions with it will take place there until it’s unstaked.
Types of Binance staking
Binance offers 3 types of staking crypto:
- Locked Staking
- DeFi Staking
- Ethereum 2.0 Staking
Let’s go through each one step-by-step.
Locked staking is the ‘standard’ option: you lock up your funds on Binance so that the platform can use it, and you get interest in return.
It’s called “locked” because of the fixed duration of the staking term: you can only choose a predefined period, and for most coins, the choice is between 30, 60, 90, and sometimes, 120 days.
For example, the LIT coin can bring you a maximum of 61.99% APY (pretty LIT if you ask me) and can be staked for 30, 60, and 90 days.
Keep in mind that each term offers a different APY: for example, the 60-day term for this coin will bring you an annual 16.5% while adding another month to the term will see the number almost quadruple. Before choosing a coin, make sure to study the APY numbers for each term and choose the one that suits you best.
1. Choose a coin
You can stake ~110 cryptocurrencies via Binance Locked Staking. To stake a coin, simply choose it from the list or search for it in the search bar.
If you’re happy with the APY and the term length, hit “Stake Now”, and you’ll be taken to the staking menu.
2. Study the terms
Here, you’ve got a rundown of all the details of your staking: its type, length, amount to lock, and the summary.
An important thing to note here is that there is a dynamic time schedule for your staking term; it shows exactly how soon you’ll start earning interest and at what exact point you’ll be able to redeem your coins.
That said, you can always fully withdraw your staked cryptos from the account if you happen to need them elsewhere during your staking term — but you won’t get any interest in that case.
3. Agree & Confirm
You can also enable auto-staking, which will re-stake your coins as soon as the current staking term expires.
If you’re happy with the terms, agree to the service agreement, and press “Confirm”. Your staked funds will now be visible in your Earn wallet (Main Page -> Wallet -> Earn).
In the Earn menu, choose the Staking tab. Here, you can view and manage your Binance staking subscriptions.
If you need your coins elsewhere, you can always redeem them before the end of the term, but once again, without any interest. For that, press “Redeem earlier”.
Read & agree with the terms, and confirm.
Your funds will be available again on the Spot Wallet in accordance with the redemption date in the status bar.
This type of Binance staking allows you to participate in the development of decentralized projects. It’s important to note that in DeFi staking, you don’t stake your cryptos directly on Binance, but rather, allow Binance to stake it with a DeFi project on your behalf.
That is, your funds will be locked on a smart contract outside Binance, and therefore might be subject to risk. Carefully read the risk warning before proceeding with DeFi staking.
1. Choose a coin
Click on the DeFi staking tab in the Staking menu.
You’ll see a list of DeFi coins available for staking. Mind that unlike in Locked staking, here you can choose between a fixed and a flexible term.
You may also notice that De-Fi protocols allow staking BTC and ETH, unlike locked Binance staking.
Let’s say we are interested in staking BUSD.
We can earn a 3.21% APY with a flexible term and 13.33% if we commit our funds for 120 days.
One more difference from Locked Binance staking is that we can see the name of the protocol we’ll be staking the money on.
For example, this offer comes from the Venus protocol. You can look up the protocol and make your own judgement about whether or not it’s worth trusting.
If you’re happy with the terms, click “Stake Now”.
2. Study the terms
A window will open up with all the details listed.
Here, double-check the term and enter the amount that you want to stake.
We’ll go for a flexible term this time, and here’s what our interest schedule will look like.
Also, make sure to check the info button next to “Summary” — there’s some important info about subscriptions and redemptions.
3. Agree & Confirm
If you’re happy with the terms, tick the service agreement box, and click Confirm. Your funds will now move to the Earn Wallet (Main Page -> Wallet -> Earn).
To access your DeFi staking balance, navigate to Staking -> Flexible/Locked DeFi Staking. Here, you can view your staking balance, interest, and other details.
Much like with locked staking, you can redeem your staked coins at any time, but there’s an unstaking window, which usually lasts about a day. Make sure to agree with the terms and the loss of interest, and confirm your redemption.
Ethereum 2.0 Staking
Binance also allows you to invest in the upcoming transition of the Ethereum network from its current Proof-of-Work model to Proof-of-Stake. You can stake your ETH to fuel this transition and earn interest as the network makes its way to PoS. Mind that this is a long-term investment, and Ethereum has been known to be in this transition for quite a while now.
To access Ethereum 2.0 Staking, head over to your Earn Wallet.
Here, click on the ETH 2.0 button on the right side of the page.
You’ll be taken to a page spelling out all the details of ETH 2.0 staking on Binance, and, if you agree, you can stake your ETH right away. Mind that the APY for this option will be changing dynamically — the more ETH is staked globally, the lower the APY.
To sum up
Congrats! With the help of this article, you have learned how to stake crypto on Binance. Keep in mind that the cryptocurrency market is very volatile. Don’t get tempted by high annual percentage yield numbers, and study the project you plan to invest in. Keep a cold head no matter what, and happy staking!