Binance announced it is launching its official staking platform as a value-added service to Binance exchange users. The information was released a few days ago by Binance in a blog post.
Binance Launches Staking Platform
The major cryptocurrency exchange Binance is now offering a new staking service to users that would allow individuals to deposit their token holdings and earn staking rewards. One of the main benefits for users is that they would not have to set up their own nodes to fulfil minimum staking amounts or time lengths.
The Proof-of-Stake (PoS) consensus algorithm allows users to validate blocks without having to use large amounts of energy to do so. Proof-of-Work (PoW) systems consume large amounts of energy through miners that confirm transactions and secure networks.
— Binance (@binance) September 26, 2019
By staking through PoS blockchain networks, it is possible for users to receive generous returns according to the size of the stake users have. However, users have to lock these funds for a long period of time.
The blog post reads as follows:
“With Staking, Binance users will be able to grow their funds by receiving monthly rewards & distributions simply by depositing and holding funds on Binance.”
As mentioned before, users will be earning staking rewards without having to be worried about setting up nodes or locating minimum staking amounts, among other technical requirements.
Binance informed that they will support 8 digital currencies, including NEO, Ontology (ONT), VeChain (VET), Stellar (XLM), Komodo (KMD), Algorand (ALGO), QTUM, and Stratis (STRAT). Holders of NEO, ONT and VET will earn GAS, ONG and VTHO, respectively.
At the moment, the previous yield for staking Algorand was 21.41% and Binance estimates that it would provide an estimated annual yield of 12%-14%. Meanwhile, Stellar registered a previous yield of 7.05% and it has an estimated annual yield of 2%-4%.
On October 1st, Binance will update its staking calculation methodology in order to provide a more accurate distribution of these rewards.
Users balances will be derived by taking hourly snapshots that will calculate a final snapshot for each day. Thus, users will have an average of 24 snapshots each day. This would allow users to have a fairer distribution of rewards rather than taking just a single daily snapshot.
In the future, new digital currencies could be supported by the platform that is continuously expanding offering new services and solutions to crypto users.