This Binance feature is especially made for crypto traders who wish to earn from their idle digital assets during sideways condition.
Binance is the largest cryptocurrency exchange in the world by trading volume. By the end of 2022, the company had more than 128 million registered users. Binance offers a wide range of promotions and features that are aimed to satisfy clients with various backgrounds and needs. One of the most recent launches is called Range Bound.
Binance Range Bound is a product that offers rewards to users who can successfully predict that the price of a certain asset will stay in a certain range during the subscription period.
It is based on the range-bound trading strategy, which involves buying an asset when the price is at the lower end of the range (support line) and selling when the price is moving toward the upper end of the range (resistance line). This method is commonly used in sideway markets when the price is more likely to stay within the range than to break out.
How to Get Started with Binance Range Bound Via Website
1. Head over to Binance's official website and log in to your Binance account. Click "Earn" and select "Range Bound".
2. Choose your preferred digital asset (BTC or ETH).
3. Select the price range, potential APR, and settlement date that you prefer. Click "Subscribe" to continue.
4. Enter the subscription amount. You can subscribe using stablecoin (USDT) or other tokens (BTC or ETH).
5. Choose the potential APR percentage that you want to earn at the end of the subscription period. Keep in mind that the higher the APR, the higher the subscription amount at risk.
6. Read and agree to the service agreement and check the confirmation box. Click "Confirm" to finish the setup.
How to Get Started with Binance Range Bound Via Mobile App
1. Log in to the Binance app and tap "More". Scroll down to find the "Earn" section and tap "Range Bound".
2. Choose your preferred digital asset (BTC or ETH).
3. Select your preferred price range, potential APR, and settlement date, then click "Subscribe". You can also tap "View Chart" to see the price history of the digital asset before subscribing.
4. Enter the subscription amount.
5. Decide the potential APR from the available options.
6. Read and agree with the service agreement. Click "Confirm" to subscribe.
How Binance Range Bound Works
As a product that rewards users for making the correct prediction of a certain asset's price movement during a certain period, Binance Range Bound aims to predict when the reference price of the chosen digital asset stays within the pre-determined price range during the entire subscription period.
Once the subscription period begins, digital assets that you use to subscribe will be immediately transferred from your Spot account to your Range Bound account. Keep in mind that you won't be able to cancel the subscription or withdraw the deposited funds under any condition until the subscription period ends.
To receive greater rewards, you may decide a certain percentage of the subscription amount to be forfeited if the reference price ends up touching or breaking the upper/lower level of the selected price range during the subscription period. So, the higher the subscription at-risk amount, the higher the potential APR.
There are two possible outcomes that you may get in Binance Range Bound:
- If the reference price stays within the price range during the whole subscription period, then your deposited digital assets will be transferred back to your Spot account and you will receive the corresponding APR within six hours of the settlement date.
- If the reference price touches or breaks the price range at any point during the subscription period, then you will have the subscription amount at risk forfeited and you will not be entitled to any rewards.
The Calculation of Range Bound Rewards
The potential APR in Binance is calculated using the following formula:
Range Bound Digital Assets (Potential APR% Subscription Period / 365)
Let's say that you subscribe to Range Bound with the following conditions:
- The preferred digital assets are BUSD1000
- The subscription period is 10 days
- The underlying digital currency is ABC
- The upper price range is BUSD100 and the lower price range is BUSD 90
- The subscription amount at risk percentage is 2%
- The potential APR is 5%
If the reference price stays within the price range on the settlement date, Binance will transfer back your deposited BUSD1000 along with the rewards of BUSD1000 (5% 10 / 365) = BUSD1.3689
In total, you will receive BUSD1001.3689 on the settlement date at 08:00 UTC. The amount will be reflected in your Spot account approximately within six hours.
If the reference price is equal to or exceeds the price range, you will not get any rewards, but Binance will still transfer your digital assets minus the subscription amount at risk.
In total, you will get BUSD1000 - (BUSD 1000 2%) = BUSD980. In this sense, you've made a loss of BUSD20.
The Bottom Line
Binance Range Bound can be a perfect solution for crypto traders who are aware of their risk tolerance and have a good understanding of technical analysis. It also offers high flexibility because you can decide your own conditions based on your needs and personal preferences.
However, it is important to note that this product is not without risks. Given the volatile nature of crypto markets in general, building a strong range-bound strategy may not be that simple. If you're not careful, you may end up getting less than the amount you deposited during your subscription. This is why you must ensure to read all the terms and conditions before subscribing and learn how to minimize risks.
FAQs on Binance Range Bound
What are the benefits of Binance Range Bound?
Firstly, Binance offers a wide variety of digital assets and price ranges that you can choose on the subscription page. Secondly, Binance does not charge any additional fees to participate in Range Bound. Lastly, you can get the chance to earn higher rewards by simply predicting the price movements of a certain asset within a certain period of time. This is a great option for those who want to earn additional returns from idle digital assets without having to sell.
What are the risks of Binance Range Bound?
The most obvious answer is that you may get a loss if the price touches or breaks the upper/lower ranges at any point during the subscription period. Aside from that, subscribed assets are locked during the subscription period, so you won't be able to use or withdraw them before the settlement date.
When should I use Range Bound?
Range bound trading typically takes place in a sideways or ranging market because prices tend to move horizontally between high and low prices. As such, choose to use this feature when you're sure that the market would not break out of the current range.
How to view my subscription?
You can check your subscription either via the Binance website or mobile app. For the former, simply open the website, go to "Orders", choose "Earn History", then click "Range Bound". Meanwhile, if you use the mobile app, you can go to "Wallets" and choose "Earn". Tap "Flexible Savings" and change the settings to "Range Bound". You'll be able to see all of your current subscriptions and settlement items.
Can I cancel my subscription before the settlement date?
No, you won't be able to modify or cancel your subscription before the period ends. Make sure to pick the most suitable subscription period that works for you before subscribing.
Apart from joining Binance Range Bound, you can also earn additional income from Binance DeFi staking, which allows you to make profit simply by locking your digital assets for a certain period of time.