What is Binance DeFi Staking and how to use it
What is DeFi?
The term DeFi stands for “Decentralized Finance”. Unlike CeFi (Centralized Finance), our existing monetary system, DeFi provides users with decentralized financial services through smart contracts on a blockchain.
About Binance DeFi Staking
Currently, DeFi projects (DApps) have not been fully adopted for two main reasons - lack of public awareness and complicated and non-intuitive user interface. This is why Binance introduced DeFi staking to help proxy users to participate in related decentralized projects. This allows users to access DeFi in a user-friendly and straightforward manner. Without the need to manage private keys, acquire resources, make trades, or perform other complicated tasks required to participate in DeFi Staking. By simply clicking [Stake now], you can participate in DeFi Staking projects and earn high returns easily and safely.
How to participate in DeFi staking on Binance
Login to your Binance account, click [Finance] - [Binance Earn].
Scroll down to [Locked Staking] and click [View More].
Click [DeFi Staking] and you can see all the DeFi staking projects currently available in Binance Earn with an estimated annual yield, staking duration (flexible or fixed), minimum locked amount, and the staking status.
Once you choose the asset you want to stake, click [Stake Now] to see details about this staking offer.
You can choose either Flexible or Locked staking and adjusting the duration. You will then see the [Estimated annual percentage yield (est. APY)].
- "Flexible" allows you to redeem your staked assets at any time. When you choose to redeem, we'll return your assets to your Spot Wallet the following day.
- "Locked" refers to staking your assets for a specific time frame. Compared to Flexible Staking, Locked Staking provides higher interests but requires you to lock your assets for the displayed duration. You can still redeem your assets at any time you wish before the end of the locked duration, but you won't receive any interest generated over your staking period. Your staked assets will be unlocked and returned to your Spot Wallet the following day.
*During the staking period, your assets will be locked on-chain, so you won't be able to withdraw or perform any transactions with the staked assets.
[Available amount] shows the available balance in your Spot Wallet that you can use to stake on Binance Earn. There is a minimum required limit for staking, and if your balance is lower than that, you won't be able to stake. Also, please note that if the total remaining quota of the product is lower than your available balance in your Spot Wallet, you will only be able to purchase the remaining amount for staking.
Enter the [Lock Amount] you want to stake, check the Staking Summary on the right, read and agree to Binance Staking Service Agreement and click [Confirm purchase].
You can find your staking details from [Wallet] - [Earn] - [DeFi Staking]. Once you staked the product successfully, interests will be calculated starting at 00:00 (UTC) the following day and distributed to your Spot Wallet every day after 00:00 (UTC).
For Locked Staking, when the staking period ends, your staked assets will be redeemed automatically and the funds will be returned to your Spot Wallet.
If you want to redeem your assets before the locked period ends, click [Redeem earlier]. Please note that unlocking your staked assets requires a specific time based on the specifications of the chain you're staking on. If you redeem your staked assets in advance, you will lose your interest and the interests you have generated will be deducted when your assets are returned.
Binance strives to offer its users only the best DeFi Mining projects. However, Binance only acts as a platform to showcase projects and provide users with related services, such as accessing funds on behalf of the user and distributing earnings, etc. Binance does not assume liability for any losses incurred due to project on-chain contract security issues.
What are the advantages of DeFi Staking?
- Easy to use: You don't need to manage multiple private keys, acquire resources, make trades, or perform other complicated tasks to participate in DeFi Staking. Binance's one-stop service allows users to obtain generous online rewards without having to keep an on-chain wallet.
- Funds are safe: Binance selects only the best DeFi projects in the industry and monitors the DeFi system in real-time while it's running in order to reduce the risks associated with such projects.
- Higher earnings: The fees required for DeFi Staking are low. Users are able to earn the highest possible returns in the best way, while maintaining the same level of risk.
Does Binance bear the losses if an on-chain contract is attacked during DeFi Staking?
No. Binance only acts as a platform to showcase projects and provide users with related services, such as accessing assets on DeFi projects through a proxy and distributing earnings, etc. Binance does not bear any liability for losses incurred as a result of on-chain contract security.
After I participate in DeFi Staking, how is the earnings cycle calculated?
DeFi Staking subscriptions are closed during 23:50-00:10 (UTC) daily. No interest is accumulated on products purchased on the day of the subscription. Once funds are successfully allocated to Locked Staking, earnings are calculated beginning at 00:00 (UTC) the following day. The minimum earnings calculation period is one day; earnings for a period of less than one day will not be included in the earnings distribution.
How long do I need to lock up my funds to participate in Defi Staking?
Currently, the lock-up period for regular products is 1 day. Funds will be unlocked and returned to your Spot Wallet on T + 1. However, as we support more types of products, the lock-up periods will vary. You can check the lock-up periods for different products from Binance Earn.
If I redeem in advance, can I still earn part of the interest?
No, early redemption will, unfortunately, deduct all interest-based income. The assets allocated to staking are locked in the smart contract on the chain, and the redemption operation requires a more complicated manual operation, including on-chain transfer fees. Please choose the appropriate lock-up time when subscribing to DeFi Staking products.
Why is the principal reduced for early redemption?
There is no principal penalty mechanism for early redemption. The reduction of the principal is made to deduct the interest that has been distributed.
Example: User A subscribes to 7-day staking utilizing BNB at 9:00 PM on Oct 9. The income will be calculated at 8:00 AM on Oct 10, and the user will receive the previous day's lock-up income after 8:00 AM on Oct 11 in his Spot Wallet. If the user decides to redeem in advance at 4:00 PM on Oct 12, the paid income from the previous days will be deducted from the principal, therefore reducing the principal payout amount.
How long does it take to redeem in advance?
Early redemption requires one day to be unlocked. This is because the locked assets are used to participate in the on-chain contract. Redemption and distribution actions also take a certain amount of time to be fulfilled.
Example: User A redeemed a BNB based DeFi Staking product in advance at 9:00 PM on Oct 9. The unlock period is one day. The unlock period will begin at 8:00 AM on Oct 10 and end at 8:00 AM on Oct 11. Therefore, the user will receive the principal at the earliest on the morning of Oct 11. Before investing in DeFi products, please consider the limitation of the unlock period before staking your assets.