What is Locked Staking？
“Locked staking” refers to the process of locking your digital assets on a Proof of Stake blockchain for a certain period of time. This not only contributes to the network but also provides you staking rewards.
More specifically, Proof of Stake (PoS) is a consensus mechanism that selects block validators based on the number of coins they stake. The more coins at stake, the higher the rewards.
Binance Locked Staking provides an easy way for HODLers to stake and earn rewards.
What's the difference between Binance Staking and Binance Savings?
Binance Staking relies on Proof of Stake consensus, meaning that it is conducted on the blockchain through the use of smart contracts. On the other hand, Binance Savings is not conducted on the blockchain. It is a financial product that allows Binance users to lend and earn interests. It provides flexibility to redeem funds at any time and the convenience of daily interest. The Binance Savings interests come from Binance Loan and Margin.
Why do I need to wait for several days after I redeem my tokens in Locked Staking?
Because staking is conducted on the blockchain via smart contracts. The wait time to redeem your tokens varies according to the blockchain's consensus mechanism. Different blockchains require different redemption times.
For example, to unstake EOS, you need to wait 72 hours, while unstaking DOT requires you to wait 28 days.
Binance, as the world's leading cryptocurrency platform, optimized the distribution process of funds and shortened the redemption time to 1 day. Please note: The standard redemption time is subject to the actual redemption on the project blockchain, and Binance may adjust the 1-day redemption time in the future.
How is the Staking APY calculated? Why is the APY on the Staking page dynamic?
Binance does not determine the staking APY. The APY is adjusted daily based on the on-chain staking rewards, and the specific APY is subject to the page display on the day.
Staking subscription and redemption
- When you subscribe to a Locked Staking product, the amount required for the subscription will be deducted from your spot account.
- The interest will not be calculated on the day of subscription. The interest will be calculated on the second day, and will be distributed on the third day. For example, if you subscribe on Feb 1st, the interest will start to be counted on Feb 2nd, and will be distributed on Feb 3rd. Besides, Staking's interest is distributed daily.
- Users can choose earlier redemption. After choosing earlier redemption, users will NOT lose their principal, but the distributed interest during the lock-up period will be deducted from the user's principal. Moreover, the redemption requires a certain unlocking period. It takes 1 day to unlock the tokens and 1 day to redeem the funds, which takes 2 days in total.
Staking interest distribution
Interest will be calculated and distributed between 0:00 and 8:00 (UTC + 0) on the second day after the subscription day.
However, the distribution may be delayed sometimes due to unfavorable network conditions.
Individual subscription limit
Different Staking products have different durations and subscription limits. The subscription limit refers to the maximum amount of tokens that each user can subscribe. Binance Staking will dynamically adjust the limits according to the market condition and the degree of risk.
How to stake on Binance
First, log into your Binance account.
Next, find the [Finance] tab at the top. Go to [Binance Earn], then select [Staking]-[Locked Staking].
Here, you can see all the Locked Staking products with an estimated annual percentage yield (est. APY), duration days, and minimum locked amount.
Choose the asset you want to stake, adjust the duration, then click on “Stake now”. On the next page, you’ll find all the details about the selected staking offer.
The page will show the estimated annual percentage yield (est. APY) for each duration, allowing you to pick the best offer for you.
The estimated annual percentage yield (est. APY) is adjusted daily based on the on-chain staking rewards.
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 allocated assets.
"Available amount" shows the available balance in your spot wallet that you can use to stake on Locked Staking. There is a minimum required limit for staking. If your balance is lower than that, you won't be able to stake.
Once you subscribe to the product, interests will be calculated from 00:00 (UTC) of the following day.
The interests are distributed to the [Fiat and Spot wallet] every day after 00:00 (UTC). When the process is complete, the staked assets will be redeemed automatically, and the funds returned to your spot wallet.
After confirming the details, enter the locked amount you want to stake and click on [Confirm purchase].
You can find more details under [Wallet] → [Earn] → [Locked Staking].
If you want to redeem your assets before the end of the process, click on the [Redeem earlier] button.
Please note that unlocking your staked assets requires a specific time based on the specifications of the chain you're staking on. Binance Locked Staking allows you to redeem assets the following day. However, it sometimes takes 48-72 hours to receive the tokens due to different global time zones.
Remember that if you decide to redeem the "Locked Staking" products in advance, the interests you have generated will be deducted when your assets are returned.
To learn more about Staking, please refer to Binance Academy’s article: What Is Staking?