What Are Wrapped Tokens and How to Borrow Them on Binance?
BTokens are wrapped tokens offered by Binance to help extend assets’ functionality to blockchains other than their native one.
Binance Loans allows users to borrow bitcoin and other cryptocurrencies like BTokens easily.
Learn more about wrapped tokens and how to borrow BTokens through Binance Loans.
Binance’s wrapped tokens, BTokens, are designed to help users tap into the decentralized finance (DeFi) ecosystem. Here’s how to borrow BTokens through Binance Loans.
BTokens – Wrapped Tokens Brought to You by Binance
Wrapped tokens are digital assets representing locked collateral of the original asset on a different blockchain, thus allowing the transfer of tokens’ value and utility to originally unsupported networks. The concept of wrapping tokens stems from the need to increase the interoperability of tokens and expand their utility to multiple networks. You may have come across ‘Wrapped Bitcoin (WBTC),’ tokenized bitcoin that allows BTC owners to access financial opportunities not offered on the native Bitcoin blockchain.
Binance designed a range of its own wrapped assets, BTokens, to convert various crypto assets onto Ethereum and tap into numerous decentralized finance (DeFi) apps and projects. Some assets supported are bitcoin (BTC), ether (ETH), and Polkadot’s DOT. Notice that they aren’t ERC-20 tokens? The BToken equivalents, BBTC, BETH, and BDOT, are ERC-20 versions of the underlying assets.
What Is Binance Loans?
Binance Loans allows users to borrow up to 65% of the value of their collateral. Borrowed assets can be used for any transaction and can even be withdrawn from the platform. Binance Loans is suitable for users who seek BToken liquidity but do not want to sell their assets. Below are some other benefits of using Binance Loans to borrow BTokens.
Flexible loan terms
We provide 7, 14, 30, 90, and 180-day loan terms. Interest is calculated based on hours borrowed.
If you return the loan amount early, we’ll only charge you interest based on hours borrowed.
More than 100 loanable assets
We offer over a hundred loanable assets on and support a range of cryptocurrencies as collateral.
You can stake specific assets (ADA, AVAX, BNB, CAKE, CTSI, DOT, KSM or NEAR) for reduced loan interest. Remember that the asset used as collateral is not eligible for staking rewards.
Use funds anywhere
Borrowed funds can be used anywhere within the Binance ecosystem. You may also withdraw the funds to use them outside the platform.
How to Borrow BTokens on Binance Loans
Any verified Binance user can borrow on Binance Loans. Here’s how you can borrow BETH on the Binance website.
Step 1: Log into your Binance account and click [Crypto Loans] on the Finance tab.
Step 2: Select ‘BETH.’ Decide what asset you want to use as collateral and for how long you want to borrow the BTokens. Loan terms range from 7 to 180 days.
Step 3: Confirm your order details before clicking [Start Borrowing Now] - [Confirm]. You are now ready to use the borrowed BETH!
Alternatively, see how to borrow BTokens via the Binance app.
Repaying crypto loans
If you’re ready to return the borrowed funds, follow these steps.
Step 1: Log into your Binance account and click Order Page.
Step 2: Pay the interest first and then the principal amount. Please note: If you’re repaying early, interest will still be charged according to hours borrowed. You will not receive a penalty for repaying early.
Adjusting Loan-to-Value (LTV) Ratio
Binance Loans uses the Loan-to-value (LTV) ratio to assess each individual’s lending risk level. Once your LTV exceeds the Liquidation LTV, your collateral will be forcibly liquidated to repay your loan.
Calculate your LTV and avoid forced liquidation using the formula below:
LTV = Loan Amount / Collateral Amount x 100%
Loan Amount = Principal + Interest
Visit this Binance Loans user manual for an in-depth guide to calculating or adjusting your LTV ratio.
It's a Wrap!
Binance Loans offers a simple way to borrow wrapped tokens. Are you considering exploring a new financial opportunity? You can move your BTokens out of the Binance ecosystem and onto another blockchain like Ethereum. Always do your own research (DYOR) before entering any trade with loaned crypto. Experienced traders who have done their due diligence can access BToken loans on Binance today.
For more information, please visit:
(Academy) What Are Wrapped Tokens?
(Academy) A Beginner's Guide to Binance Loan
(Support) How to use Binance Loans?
(Academy) Interest Rates Explained