Binance DeFi Staking: How to Get Profit from Decentralized Finance

Binance DeFi staking offers user-friendly and straightforward access to various DeFi projects. More importantly, it allows you to earn generous passive income.

Decentralized Finance (DeFi) is a new transformation of banking and financial services that is based on blockchain technology. Essentially, DeFi allows you to replicate many features available in traditional finance, but with cryptocurrencies. You can get the opportunity to borrow and lend money peer-to-peer, as well as earn interest from your digital assets. Additionally, you can transfer money quickly to anywhere in the world and access your funds via digital wallets without having to pay traditional banking fees.

One of the most interesting activities to try with DeFi is called DeFi staking. It is quite a powerful way to encourage users to hold on to their crypto holdings and in return, users will earn considerable staking rewards. While it's not as resource-intensive as crypto mining, DeFi staking is far more accessible for both novice and expert crypto holders. But before you start, it's important to determine the right platform to perform this activity.

Today, DeFi staking is available on several well-known platforms, including the leading crypto exchange, Binance. Apart from facilitating the buying and selling of cryptocurrencies, the company apparently allows users to stake their digital assets in various DeFi projects too. Here's everything you need to know about it.

What is Binance DeFi Staking?

DeFi staking allows you to stake your coins in return for rewards. You could either stake your digital assets in a liquidity pool to provide liquidity or stake in the reward pool of a certain DeFi protocol. In return, you can get a massive range of opportunities depending on your risk tolerance.

In a nutshell, DeFi staking offers an easy way to participate in decentralized projects in a user-friendly and straightforward process. There is no need to manage your private keys, get additional resources, make trades, or perform other complicated tasks to participate. With only one click, you can participate in various DeFi staking projects and get the chance to earn handsome returns. It's certainly a great alternative for those who have some spare coins in their balance to produce passive income.

There are two types of DeFi staking that Binance offers:

• Locked: This option can give you high interest, but it requires you to stake your asset for a specific time period. During the staking period, your assets will be locked on-chain so you won't be allowed to withdraw or use them for any transaction. Once the duration is over, your staked assets will be returned to your Spot Wallet the following day. Please note that you can still withdraw your crypto before the end of the duration if you want, but this will cancel out the accumulated interest.
• Flexible: This option allows you to redeem your staked assets at any time you want without any penalty. Once redeemed, the staked asset will be transferred to your Spot Wallet the following day. However, keep in mind that the interest you'll get from flexible staking might not be as huge as locked staking.

How to Participate in Binance DeFi Staking

Below are the steps that you should follow to participate in Binance DeFi staking:

1. Head over to Binance's official website and log in to your Binance trading account. Then, click "Finance" on the main page and choose "Binance Earn".

2. Click on "Locked Staking" to "View More".

3. Head over to the "DeFi Staking" tab at the top of the page. You'll see all of the DeFi projects that are currently available on the platform. Along with the project's name, you can also see the estimated annual yield, staking duration (locked or flexible), minimum locked amount, and the staking status.

4. Once you make a choice, click on the project that you want to stake and click "Stake Now". You'll then see a pop-up that contains the details of your request. Then, enter the locked amount that you wish to stake. Don't forget to make sure that you have enough coins to stake by checking your balance and the minimum required limit for staking before you finish the order.

Once you're ready, read the Binance Staking Service Agreement and the Staking Summary, then click "Confirm Purchase" to start staking.

5. You can see your ongoing staking details by clicking "Wallet" -> "Earn" -> "DeFi Staking". Your staking interests will be calculated from 00:00 (UTC) the following day and your earnings will be distributed daily after 00:00 (UTC).

Redeeming Your Earnings

In Binance, you can redeem your staked coins at any time you want. If you choose flexible staking, you simply need to see your ongoing staking and unstake the ones you want to redeem. Your staked assets will be transferred to your Spot Wallet the following day along with your earned interest. But if you choose locked staking, there are several things that you need to consider.

Usually, the lock-up period for regular products is 1 day. This means the staked asset will be unlocked and returned to your Spot Wallet the day after that. However, this number may vary depending on the DeFi project that you choose. You can see the lock-up period of each project in the project's details.

If you choose to redeem your assets before the lock-up period ends, you simply need to click "Redeem Earlier". Please note that this means you will lose all of your interest and the interests you've accumulated will be deducted when your assets are returned. Also, since the assets are locked in a smart contract on the chain, the redemption operation requires extra steps. As a result, you might be charged with on-chain transfer fees.

Keep in mind that the process of early redemption needs one day to finish because it takes time to redeem and distribute the locked assets from the on-chain contract. So, if you redeem your locked BNB at, let's say, 10:00 PM on January 11, then the unlock period shall begin at 09:00 AM on January 12 and end at 09:00 AM on January 13. You'll get your coins back at the earliest hour of January 13. Therefore, please consider the unlock period wisely before staking your assets.

The Benefits and Risks of DeFi Staking

To begin with, Binance DeFi staking is very easy to use. You don't have to do any complicated tasks to participate. Just simply choose the project, enter the amount that you want to stake, and confirm your order. It's a very time-effective solution to make your idle coins more productive. Other than that, DeFi staking offers considerable passive earnings. The fees are actually really low compared to other investments, yet the returns are pretty high.

However, even though the projects available on the platform are already carefully ed, it's important to understand that Binance only acts as the platform that showcases those projects and facilitates activities such as staking, distributing funds, and so on. Therefore, while many projects in Binance DeFi staking offer high APYs, there are still some risks involved as Binance won't be responsible for any loss and security issues from on-chain smart contracts.

Conclusion

A few years back, DeFi seemed to be quite a far reach for mainstream uses. But thanks to Binance, it is now easier than ever to participate in DeFi projects and earn passive income from its staking. The simple process and high potential return certainly sound attractive to all types of crypto holders. The risks are also considered quite low, although it is still necessary to filter the options and do separate research on the project for further safety.

Apart from that, you also need to check if the project is legit and if the conditions are suitable for your preference. This includes looking at the minimum staking requirement and the staking rates. If you choose locked staking, make sure that you won't need to liquidate the asset during the lock-up period. Last but not least, don't forget to only use spare coins to stake.

Binance is quite reputable for innovative features and tools that offer copious amounts of ways to earn income from the cryptocurrency industry. Other than staking and saving, there is also Binance P2P lending that you can explore further here.