TL;DR

BETH is the tokenized version of ETH staking on Binance. This is an easy way to participate in staking ETH 2.0 on Beacon Chain. By holding it, you are entitled to the reward earned by staking node ETH 2.0 on Binance. But that's not all. You can use it in several other ways on the Binance platform and Binance Smart Chain (BSC).


Introduction

With the launch of Beacon Chain in December 2020, a set of updates (ETH 2.0) aimed at improving the scalability of Ethereum are on schedule. As part of phase 0 of the rollout plan, it is already possible to stake ETH on this new chain. BETH allows you to easily participate in ETH staking without losing the flexibility to withdraw ETH at any time.


What is BETH?

BETH is a tokenized version of ETH staking. Each BETH represents 1 ETH of staking on Binance. But wait, doesn't Ethereum run on Proof of Work (PoW)? At the moment it is. However, as part of ETH 2.0, Ethereum will fully transition to Proof of Stake (PoS).

Due to the complexity of updates, it is performed in several phases. The first step was the launch of the so-called Beacon Chain, which will become the core of Eth2 after the full implementation of sharding. The Beacon Chain is already live and has more than 3.5 million ETH secured as of March 2021.

The deposit contract for Beacon Chain works only one way. This means that users can deposit ETH but won't be able to withdraw them until ETH 2.0 is fully launched, which could take years. Also, they can only deposit 32 ETH.

All that ETH in the Beacon Chain is already getting staking rewards. So what will you do if you don't have 32 ETH or want to keep withdrawal flexibility? You can join one of the many ETH 2.0 staking pools. One of them is provided by Binance.

You can convert your ETH to BETH at a 1:1 ratio and start getting rewarded for staking in BETH. Great, but what if you still want to use your ETH elsewhere? 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

You can use your BETH in several ways. One is to simply leave them on Binance and get rewarded for staking. You can also withdraw your BETH on Binance Smart Chain (BSC) and use it in DeFi applications. Let's look at the different options.


BETH на Binance Launchpool та Liquid Swap

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


BETH на Binance Liquid Swap

You can also use BETH on Binance Liquid Swap. For example, you can earn rewards by providing liquidity to an ETH/BETH liquidity pool. Please note that you can add ETH, BETH or both coins to the liquidity pool, but if you add both coins, you will not pay a fee.

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BETH in loan-lending protocols

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


BETH on PancakeSwap

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

The advantage of providing liquidity to this pool is that since BETH and ETH have equal or very similar prices, you are less exposed to erratic losses than in other pools. If you don't understand what this means, read our article on non-permanent losses.

In short, this pool is less prone to erratic losses because the relative volatility between BETH and ETH is much lower than for example between ETH and BUSD. In other words, the price of ETH and BETH should generally stay in a small price range, so the effects of volatile losses are negligible.


BETH in yield aggregators

You can also use BETH in one of the yield aggregators on BSC. You deposit your BETH and the protocol automatically tries to find the best profit opportunities for you. Beefy and Autofarm are two examples that support BETH.


Are BETH worth more than ETH?

If you go to the BETH/ETH market on Binance, you will see that BETH is not traded 1:1 to ETH, even though each BETH represents 1 ETH of staking. Why is this so? In short, these are different assets. The price determination between BETH and ETH is completely dependent on the market. BETH is a tokenized version of ETH staking.

Therefore, BETH has different qualities than ETH. The fact that it trades at a different price means that the market values ​​these qualities differently than ETH. Currently, BETH can be exchanged for ETH, which means that the asset is less flexible than ETH. At the same time, it entitles the owner of the coins to staking rewards.


Final thoughts

BETH is the tokenized version of ETH staking on Binance. You can earn ETH 2.0 staking rewards without worrying about the technical requirements of setting up and maintaining an ETH 2.0 staking node. In addition, there are several ways to earn additional income with DeFi applications on Binance Smart Chain.