Cryptocurrency exchange, Binance, announced phase three of its crypto-lending product yesterday. Now users can earn interest on XRP, Litecoin (LTC), and stable coin, USDC. The coins that were already part of the lending schemes were Binance coin (BNB), Ethereum Classic (ETC), and Tether (USDT). Subscriptions are based on a first-come-first-served model and the phase starts on Sept 11 at 6 am (UTC).
The scheme works in the following way. Users deposit their tokens for a fixed term of 14 days and receive a fixed interest rate (paid in tokens) on maturity. Phase two of the product had a 28-day term option, but phase three is limited to 14 days.
There is a total subscription cap to the number of token accepted in each phase, and also a limit on how much an individual can lend. The third phase has an annualized interest rate of 7%. However, BNB and Tether have a 10% annualized interest rate.
XRP, Litecoin, & USDC joins the mix
XRP has an overall subscription cap of 1,000,000, and an individual cap of 50,000 XRP whereas Litecoin has an overall subscription cap of 6,000 LTC, with an individual cap of 300 tokens.
The Stablecoin USDC joins the likes of BNB, ETC, and USDT. The mainstream cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Cardano (ADA) are not part of this phase.
Crypto-Lending: A Controversy
Popular news outlet Bitcoinist reported that not everyone is convinced of whether Binance’s crypto-lending product is a good idea. Bitconnect, a scam crypto company had a similar model that didn’t last long. Comparisons to Bitconnect doesn’t help Binance in any way
Added to this is the problems that come with depositing tokens on a centralized exchange, that had already been the victim of a hack this year. Now even though Customers were not affected by the hack, handing control of keys to such an exchange is never a safe move as hackers are getting better and better by the day.
The first two phases were fully subscribed so regardless of what public media tells you there are still many who believe in Binance’s Crypto-Lending Schemes for better or worse.
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