In a crypto market that is witnessing almost nothing but unfavorable headlines in 2022, many people or investors are wondering how to make money from cryptocurrencies in the coming months. An excellent method to accomplish this is via staking. On the world’s largest crypto exchange, Binance, staking cryptocurrencies has long been straightforward and safe. This article is all about Binance Staking and how it works. Let’s take a look at it in more detail.
What is Cryptocurrency staking?
The principle of staking is based on the special form of some cryptocurrencies to find consensus and thus validate transactions. The proof-of-stake consensus mechanism is the process utilized by many modern cryptocurrencies to validate and verify individual transactions on their network. Anyone who makes the coins they own available for validation can become a “validator”. There are rewards from the network in the form of additional coins. More information on Proof of Stake can be found here.
Staking has thus evolved into a way of investing your coins and thus receiving passive income in the form of rewards. This is similar to the principle of how interest rates work when it comes to the bank, except that the systems are decentralized and the returns are much higher.
What types of staking does Binance offer?
As a platform, Binance offers different forms of staking with various benefits:
Flexible Binance staking
With flexible Binance staking, there are no deadlines for how long your coins should remain in a so-called staking pool. This is especially interesting for newbies and for people who want to remain easygoing with their money.
Locked Binance staking
With locked staking, the period that the coins will be made available for staking is predetermined. You will therefore be “blocked” for a fixed period of between 7 and 90 days. This typically allows for higher returns on Binance staking. The longer the tokens are made available for staking, the higher the returns.
DeFi Binance staking
With DeFi Binance Staking, transactions are processed via smart contracts. DeFi stands for Decentralized Finance and represents decentralized financial services via the blockchain.
With DeFi gaining immense popularity over the past few months and years, DeFi staking presents many options for high returns. Yet, the risk is also relatively higher, since all coins can be lost if a smart contract fails. Although Binance takes no liability, it checks the investors with whom the platform works intensively.
What are the returns on Binance Staking?
Binance Staking
Particularly in a bear market, staking is extremely attractive as a source of income. Because here you can still make passive income regardless of price movements. But what are the Binance staking returns?
When it comes to staking, we are talking about Annual percentage yield (APY), the annual return from the rewards. Average APYs vary by cryptocurrency. At Binance you can expect APYs of up to 20% depending on the coin. This also contains the in-house Binance Coin. It helps that Binance does not charge any fees.
In the above figure, you have an outline of the APYs at DeFi staking.
How does Binance staking work? – The Complete Guide
Now, if you want to operate at Binance Staking, we will give you the instructions below. The process is not complicated and can be done even by a beginner. So that no questions remain unanswered, carry out the following steps and you can start right away.
Step 1: Registration
Binance Staking
To be able to operate at Binance Staking, you must first register on the platform. Go here to register on Binance. When you register, you have the option of registering with your e-mail or your telephone number. You set your own password and will receive a code by email or SMS to confirm your account.
Step 2: Verification
For Binance, security on the platform is one of their top preferences. That’s why you have to go through a verification process at Binance. This also improves security for you. Nevertheless, the process is very simple and only takes a few minutes.
First, you enter your personal data, which is on your ID card, on the platform. You can then confirm your identity either through your bank account or through a video call. The individual steps are described very clearly in advance. After a few minutes, this verification is done. Binance will process this verification within 48 hours.
Step 3: Acquire cryptocurrencies
After your verification, you can deposit money on Binance and use it to buy cryptocurrencies that you use for staking. You can use all known payment options such as SEPA or credit card.
Step 4: Staking
Binance Staking
To start staking at Binance, you need to have cryptocurrencies in the online wallet on the Binance platform. On the platform itself, you can use its own interface to begin staking with the cryptocurrency you own or want to stake.
To do this, go to the ” Earn ” tab at the top of the menu and then go to the ” Staking ” field! There you can select between “Locked Staking” and “DeFi Staking”. Then go to the cryptocurrency of your choice and click “ Stake ”!
Now if you want to start staking on Binance, click here!