#bstockscis @BinanceCIS
đ I decided to figure out whatâs happening with dividends on bStocks $SPCXB
Of course, Iâd already seen dividends in regular stocks. But the mechanics in bStocks turned out to be more interesting đ
Binance uses a special on-chain mechanism called the Multiplier, which automatically processes corporate actions like dividends and splits.
And now the simple math:
Suppose I have a position worth $100, and the company pays conditional 5% dividends.
$100 Ă 5% = $5
But the dividend is subject to a 30% withholding tax from the US:
$5 Ă 30% = $1.50
So after withholding, the remainder is:
$5 â $1.50 = $3.50
These $3.50 donât just arrive to me as a separate payment. Binance states that the net dividend is automatically reinvested into the underlying stock, and the bStock balance increases accordingly through the Multiplier.
So, conditional $100 â $103.50 thanks to the dividend mechanism itself.
Of course, this is just an example: the actual dividend depends on the specific company, and the stock price can also change.
But what I liked was something else: the user doesnât need to calculate and reinvest the dividend themselvesâthe mechanism works automatically. đ
It seems to me that these kinds of technical details best show how bStocks work not only âfrom the outside,â but also from the inside đ
đ I decided to figure out whatâs happening with dividends on bStocks $SPCXB
Of course, Iâd already seen dividends in regular stocks. But the mechanics in bStocks turned out to be more interesting đ
Binance uses a special on-chain mechanism called the Multiplier, which automatically processes corporate actions like dividends and splits.
And now the simple math:
Suppose I have a position worth $100, and the company pays conditional 5% dividends.
$100 Ă 5% = $5
But the dividend is subject to a 30% withholding tax from the US:
$5 Ă 30% = $1.50
So after withholding, the remainder is:
$5 â $1.50 = $3.50
These $3.50 donât just arrive to me as a separate payment. Binance states that the net dividend is automatically reinvested into the underlying stock, and the bStock balance increases accordingly through the Multiplier.
So, conditional $100 â $103.50 thanks to the dividend mechanism itself.
Of course, this is just an example: the actual dividend depends on the specific company, and the stock price can also change.
But what I liked was something else: the user doesnât need to calculate and reinvest the dividend themselvesâthe mechanism works automatically. đ
It seems to me that these kinds of technical details best show how bStocks work not only âfrom the outside,â but also from the inside đ
