Popular cryptocurrency exchange Binance recently launched the BNB Vault- a new staking feature for Binance Coin (BNB) which allows users to earn 5% to 10% interest on an annual basis. Holders of BNB can earn interest against a wide range of financial products from Binance.
What is Binance Vault?
Binance Vault is a staking service that provides a 5% to 10% annual interest for staking the exchange’s native token- Binance Coin. The interest will be paid to users on a daily basis. The Vault works like a yield aggregator that lets users earn interest by leveraging the financial offerings from Binance to earn a handsome interest.
In a press release, the exchange said, “BNB Vault is a capital-guaranteed investment product with flexible access. It integrates various Binance products to maximize the income potential of your BNB from both centralized and decentralized finance in just one click, allowing BNB holders to enjoy all the benefits of the Binance ecosystem with one click.”
How do users earn the yield?
The yield is derived from the different products listed on Binance Earn. It includes new tokens rewarded via the staking incentivization scheme called Launchpool. It also includes the Binance Flexible Savings scheme and the BNB decentralized finance (DeFi) staking protocol. Changpeng Zhao, the founder, and CEO of Binance asked users to keep it simple and letting Binance handle all the technical aspects and risks related to the coin.
He also mentioned Binance handling the “rug pull”- a term that has become familiar to the crypto community. It refers to the less lucrative yields on DeFi-based options which are often used as an exit scam by bad actors. Initially, some fraudsters offered unusually high returns on the DeFi protocols to eventually “pull the rug” on the investors, leaving them with worthless tokes.
The new offering will be clubbed in Binance Earn, which includes a host of other financial products for the users, going from DeFi staking to savings accounts. BNB will still be eligible for benefits like airdrops.