How To Start Yield Farming On Binance?

Popular cryptocurrency exchange Binance released Launchpool, a method for users to earn revenue by staking tokens for yield farming. According to a Binance announcement, users of Launchpool can stake Binance’s native BNB token and BUSD stablecoin as well as other tokens, for interest-bearing rewards. Here’s everything you need to know about Yield Farming on Binance…

What is Binance Smart Chain?

What is Yield Farming?

In DeFi, yield farming is the concept of making profit on your assets by placing them in interest generating DApps. Yield farming enables users to make passive income on their idle assets, by utilizing the decentralized ecosystem developed on Ethereum, Binance Smart Chain, or any other smart blockchains. As a consequence, yield farming is changing how investors HODL in the future.

Yield farming often relies on liquidity pools. Asset holders can provide their liquidity to lending platforms or Decentralized Exchanges (DEX). In return, the liquidity providers earn interest in the form of fees, generated when others access their funds to borrow or exchange tokens.

What is Binance Launchpool and How to Yield Farm on Binance?

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Launchpool allows Binance users to receive new coins in return for staking their BNB, BUSD, and other tokens on the Binance Smart Chain mainnet. The number of tokens users make each day is proportional to the number of tokens they have contributed to the pool vs the total amount of tokens contributed to the pool.

Launchpool will be used to list new tokens to Binance. Farming begins 7 days before the listing, and carries on for a total of 30 days. Farmed coins are paid out daily. The staked coins can be withdrawn at any given point during the 30 days. In this way, BNB, BUSD, and ARPA coin holders are the first to receive any new coins to be launched on Binance.

Binance Announces Staking – What this means for the BNB Price!

How do you get started?

For users of the desktop version of Binance:

• Go to the “Savings” page
• Go to “Flexible Savings”
• Choose any coin showing the “Launchpool” tag (BNB, BUSD, etc…)
• Click “Transfer” for the token you want to use to subscribe
• Enter the number of tokens you’d like to add to the pool
• Click “Transfer Confirmed”

For users of the Binance app:

• Go to the “Savings” page
• Go to “Flexible Savings”
• Choose any coin showing the “Launchpool” tag (BNB, BUSD, etc…)
• Click “Transfer” for the token you want to use to subscribe
• Enter the number of tokens you’d like to add to the pool
• Tick the “Binance Savings Service Agreement” after reading.
•  Click “Confirm Purchase”.

Anyone with a Binance.com account can participate in the Launchpool. All that’s needed is a coin balance higher than 0.1 (for example 0.1 BNB) of any token supported for the pool, with no upper limits. 

Binance Launchpool and the Bella Protocol (BEL)

As mentioned earlier, Binance Launchpool will compensate users for staking BNB, BUSD, and ARPA. Binance also announced the first project on Launchpool called Bella Protocol (BEL).

Users will be capable to stake their BNB, BUSD, or ARPA tokens into three distinct pools to farm BEL tokens over 30 days. In this process, Binance will also list the Bella Protocol (BEL) and then open trading for BEL/BTC, BEL/BNB, BEL/BUSD, and BEL/USDT trading pairs.

Conclusion

Yield farming is changing the way people are HODLing crypto. It enables crypto enthusiasts to earn interest on their idle assets. But as a relatively new and still developing concept, yield farming might bare unknown risks, like smart contract faults for example. It is always important to properly research any project before allocating assets to it.

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