Summary

BETH is a tokenized version of the ETH used for staking on Binance. With this token you can easily participate in staking in the ETH 2.0 Beacon Chain. As its owner, you are entitled to receive the rewards earned by the Binance node by staking ETH 2.0. But that's not all: BETH has other uses on the Binance platform and Binance Smart Chain (BSC).


Introduction

With the launch of Beacon Chain in December 2020, an upgrade process (ETH 2.0) began to improve the scalability of the Ethereum network. At stage zero, ETH updates can already be staked on the new network. BETH allows you to easily participate in ETH staking and still withdraw ETH at any time.


What is BETH?

BETH is the tokenized asset of your ETH used for staking. Each BETH corresponds to 1 ETH staked on Binance. But doesn't Ethereum run on a Proof of Work (PoW) consensus model? Now yes. However, with ETH 2.0, the Ethereum network will completely switch to the Proof of Stake (PoS) model.

Due to the complexity of the update, it is carried out in several stages. The first step was to launch the so-called Beacon Chain, which will become the basis of Eth2 after sharding is completed. The Beacon Chain network is already live, with over 3.5 million ETH locked in staking as of March 2021.

The deposit agreement for Beacon Chain only works one way: users can deposit funds, but will not be able to withdraw until ETH 2.0 is fully launched, which could take years. Additionally, they can only deposit funds in 32 ETH increments.

All ETH in Beacon Chain already generates staking rewards. But what if you don't have 32 ETH or want to keep the withdrawal option? In this case, you can join one of the many ETH 2.0 staking pools. For example, the one provided by Binance.

You can convert your ETH to BETH at a 1:1 ratio and start earning rewards for staking in BETH. Sounds great, right? But what if you still want to use your ETH for other purposes? Binance also has a BETH/ETH spot market where you can convert your BETH back to ETH again.

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How to use BETH

There are several ways to use BETH. One of them is to simply store tokens on Binance and receive rewards for staking. But you can also withdraw your BETH to Binance Smart Chain (BSC) and use it in DeFi applications. Let's look at various use cases.


BETH в Binance Launchpool и Liquid Swap

If you store your BETH on Binance, you can use it to earn additional rewards. For example, Launchpool projects sometimes use BETH as one of the available coins. You simply lock your BETH in Launchpool and earn a newly minted token that will immediately receive liquidity from the Binance spot exchange.


BETH в Binance Liquid Swap

You can also use BETH in Binance Liquid Swap, for example by providing liquidity to the ETH/BETH liquidity pool for a fee. Please note: you can add ETH, BETH or both coins to the liquidity pool, but you will not pay a fee when adding both.

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BETH in lending and lending protocols

Another use case is to deposit BETH into a money market like Venus and earn income or use it as collateral to borrow other coins.


BETH at PancakeSwap

You can provide liquidity to the BETH/ETH pair on PancakeSwap and receive CAKE. Please note that since PancakeSwap works similarly to Uniswap, you will also need a tokenized version of ETH on BSC to provide the equivalent value of the two tokens.

The benefit of providing liquidity to this pool is that since BETH and ETH have equal or very similar prices, you are less exposed to volatile losses than other pools. If you don't know what this means, check out our article on impermanent losses.

In short, this pool is less susceptible to volatile losses because the relative volatility between BETH and ETH is much lower than for a pair like ETH and BUSD. In other words, the price of ETH and BETH tends to remain within a small price range, so the impact of intermittent losses is negligible.


BETH in profitability aggregators

Finally, BETH can also be used in one of the return aggregators on BSC. You deposit your BETH and the protocol automatically tries to find the best profit opportunities for you. Examples of BETH-enabled aggregators include Beefy and Autofarm.


Is BETH worth more than ETH?

If you open the BETH/ETH trading pair on Binance, you will see that BETH is not traded 1:1 with ETH, although each BETH represents 1 ETH staked. What explains this? In short, they are not the same asset. Determining the price between BETH and ETH is entirely dependent on the market. Remember that BETH is a tokenized version of your ETH used for staking.

The principle of its operation is different from ETH. The fact that it is trading at a different price means that the market is pricing its opportunity differently than ETH. Currently, BETH cannot be exchanged for ETH, which means it has less flexibility than ETH. At the same time, it gives the owner the right to receive rewards from staking.


Summary

BETH is a tokenized version of the ETH used for staking on Binance. You can earn ETH 2.0 staking rewards without worrying about the technical requirements of deploying and maintaining an ETH 2.0 staking node. Additionally, you have several ways to earn extra income using DeFi applications on Binance Smart Chain.