What is Binance Lending? Is it safe to borrow coins on Binance?
What is Binance Lending is no longer a new concept for professional traders. Even though you are new to the Crypto market, you have probably heard of Binance Lending, right? Since August 26, 2019, when Binance announced the launch of their own Lending platform, there has been a strong wave of code.
This is considered the beginning of the Lending trend on exchanges. And also the reason many people are curious to learn about Binance Lending with the desire to catch the trend. Today, let 's find out the most detailed information about Binance Lending with Cryptobnb
What is Binance Lending?
Lending solution is becoming more and more popular with the platform from Gate with Margin lending. Following that success, Binance Lending is a bright name appearing in the crypto market. After just over 2 years of operation, the achievements that Binance Lending have achieved are huge. To understand Binance Lending, you first need to understand Lending.
Note: The Binance Lending platform has officially changed its name to Binance Savings from April 8, 2020 and changed the name of the service packages. As follows:
- The “Flexible Deposit” service is now a “Flexible Savings” service
- "Fixed Deposit" service has a new name as "Fixed Savings" service
In the article we use the term Lending because of its popularity and familiarity. However, you can understand that Lending here is also Saving to avoid confusion when starting to join Binance lending again!
Binance Announces Launching Binance Lending on August 26, 2019
What is Lending?
Lending or “lending” in crypto transactions as well as other forms of lending. There users will use their money or other valuable assets to lend to others and receive a certain interest rate. The interest rate is not fixed but is affected by many factors that will be discussed in the original agreement. After a loan period, you will receive both interest and principal as agreed.
The easiest example for you to imagine is Lending as well as bringing a bank deposit and receiving interest. However, the interest rate here will be significantly higher to attract users to decide to lend.
In Crypto, the assets used are not cash but BTC, BNB, ETH… If you understand how Lending works, come to the next part about Binance Lending!
What is Binance Lending?
Binance Lending is simply a form of lending in which users lend their Crypto assets (BNB, USDT, ETC…) to the Binance exchange. They will receive interest at the end of the loan period at the agreed initial interest rate.
In there:
- Lender: Users with Crypto assets wishing to lend
- Borrower: Binance.
Basically, the form is somewhat similar to the Staking Rewards Program of some coins on Binance. You can refer to XLM, ALGO, KMD, QTUM, STRAT coins all receive interest.
Binance Lending is only different in that Binance is the representative to pay interest for you. Meanwhile, with Staking Rewards, the borrower will pay interest on projects.
More information for those of you who don't know, in June 2019 Binance launched a research "DeFi Series #1". Provide overview of the Lending and Borrowing market as a step to "pave the way" for Lending services.
Details of Lending on Binance
Basic information about Binance Lending:
- Officially launched to users at 13:00 on August 28, 2019 (GMT+7).
- Loan period: 14 days
- Interest is paid immediately after maturity
- Loan subscription: From 13:00 on August 28, 2019 (Vietnam time) to 7:00 a.m. on August 29, 2019.
- At launch, the supported Crypto types include: BNB (15%), USDT (10%), ETC (7%).
- The loan format is “First come First serve” which means first come first serve.
Refer to the picture below to see the different Lots for each different Crypto.
Lot size corresponding to each type of Crypto
For example: You choose Lending 10 Lot BNB, which means you will lend the floor 100 BNB. With an interest rate of 15%/year. The average profit per day can be calculated as 0.057534 BNB x 10 = 0.57534 BNB. Note that the interest rate does not stay the same in every period, but there will be changes. Depending on the market situation in each period and Binance's policy will be different.
What are the advantages and disadvantages of Lending on Binance?
After learning what Binance Lending is , you still need evaluation information to decide whether to invest or not. To help you evaluate the benefits of Lending on Binance. We have summarized the obvious advantages and disadvantages for you to consider in this section.
What are the advantages of Binance Lending?
- High level of security: You can rest assured to lend because Binance has a SAFU system that will protect/compensate users' assets. When holding assets on the floor including Lending, you will enjoy this policy.
- Easy Join: Simple steps to join is the next advantage we want to mention. Binance receives high marks for its reputation when it comes to paying interest and principal quickly. As soon as the loan term expires, both principal and interest will automatically return to your wallet.
- Large Lending Volume: The user attraction of Binance Lending is also large Lending volume. According to the exchange rate at the time of writing this article, the maximum you can lend is up to 1 million dollars with USDT. The same can lend up to $12,500 with BNB and around $7,000 more.
- Help users take advantage of idle assets and optimize profits for Holder.
What are the disadvantages of Binance Lending?
- The interest rate is not high: In general, the interest rate that Binance pays you is still uncompetitive. Most of these interest rates are just equal to or even lower than other projects.
- The amount of Crypto participating in Lending is not diverse: In the future, Binance will expand the Lending service with other Crypto coins, it can be overcome. But so far only support BNB, ETC, USDT to Lending so there are not many options.
- Deadlines lack flexibility, only a fixed period of 14 days.
Although there are still some disadvantages, the potential of Binance Lending is huge. This feature has also just been released, so it can be completely fixed and improved. Just by giving more options to users, Binance Lending could grow unexpectedly.
Compare the interest rates of Binance Lending and other platforms
Compare Binance Lending's Lending Rates with Other Platforms
As mentioned above, the Lending interest rate on Binance is just average. When compared to some other projects in Crypto like USDT, ETC, it is still less attractive. However, the special feature of BNB with interest rates up to 15% is the highest in the market. In order to attract more users to lend, Binance still needs to improve a lot in interest rates.
Who should join Binance Lending?
Anyone with idle assets can further increase by Lending on Binance. As you can see, the interest rate is around 5%, 7%, 10%. This interest rate is only higher than the bank interest rate but lower than many other forms. Therefore, this is not an attractive investment channel for all brothers.
Binance Lending will be suitable for those who have idle assets on the exchange. But still want to make a relatively safe profit or those who do not have time to buy and sell for a profit. The low interest rate can also be explained by the relatively high safety of this form. The interest you receive is directly paid by Binance, there will be less risk for the project to borrow, right?
If you are more interested in profit, then the advice is to choose BNB holder. With the belief in the long-term future of BNB and the interest rate of 15%/year is very suitable. In addition, the book SAFU protection / compensation for user property is also highly appreciated. So when choosing to hold coins on this exchange, you are somewhat more secure.
Instructions on how to do Binance Lending
To participate in Binance Lending smoothly, first of all, you need to understand the following input parameters:
- Lot Size: The loan amount in each Lot corresponds to the type of Crypto you choose.
- Value date: The date your loan begins to accrue interest.
- Redemption Date: The date you are paid interest and principal from Lending on Binance.
- Maximum Subscription: The maximum total Lot you can make a loan.
- Coupon Per Lot: The profit you will receive when the loan term ends.
Instructions to join Binance Lending
Step 1: Visit the official website of Binance, select Lending or go directly from the link: https://www.binance.com/en/lending . To continue, select the type of Crypto you want to lend and then click Subscribe.
Choose the type of Crypto you want to lend
Up to now, you can choose from 3 Crypto supported by Binance: BNB, ETC, USDT.
Click Subscribe to continue
Step 2: Enter the amount of Lot you want to lend in the blank space as shown below. Select “I have read and I agree to Binance Terms of Use” when you are sure of the quantity. Next, you need to select the Confirm Purchase button to move to the next step. Don't forget to always make sure your account has enough balance and choose the right Lots! For example, in the picture, you want to lend 10 Lots, which will correspond to 100 USDT.
Choose the amount of Lot you want to lend
Step 3: After completing the second step, the Binance system will automatically deduct the corresponding amount. If you want to check the list of loans, choose Successful Purchase!
Step 4: When it is time for interest payment (or loan expiration time), Binance pays the principal and interest in full.
What should be noted when Lending on Binance?
To join Binance Lending smoothly, you also need to note a few points:
- Ensure that the balance in the account is sufficient to participate in the loan as intended.
- The interest rate offered by Binance is the interest rate per year but the term is only 14 days. So it should be distinguished from the actual interest rate you will receive after 14 days. Self-calculating the interest rate received after this time and then joining Lending will be less surprised.
- You should only participate if you currently own that part of the property. This form will not be suitable for those who are trading, buying and selling to make a profit. Because in general, the profit is quite small, not as attractive as a normal trade.
- It is necessary to prepare psychologically that it is entirely possible that Crypto participates in discount lending. Therefore, even if you lend money, you are not sure if you will make a profit, but there is still a risk that you will lose.
Answers to frequently asked questions with Binance Lending
Can Binance Lending with odd capital?
The answer is No.
Lots corresponding to each type of Crypto have been fixed by Binance's system, Can't lend with odd numbers, but can only lend in multiples of 10 like 10, 20, 30 USDT only. For example: 1 Lot of BNB = 10 BNB, 1 Lot of ETC = 1 ETC, not allowed to enter odd capital like 15 USDT, 25 USDT…
Does the BNB loan count for the Binance Launchpad snapshot?
The answer is yes.
You can freely lock BNB in Binance Lending then profit from interest. But still completely rest assured that it will be counted when taking a snapshot for Binance Launchpad!
Are there any conditions to join Binance Lending?
To participate in Lending on Binance, you need to complete the KYC Level 2 step. In other words, after successfully verifying your identity with Passport or ID card. This is a condition for the system to open the Lending function for you.
Is it possible to get borrowed funds from Margin Trading for Binance Lending?
The answer is yes.
Just need money from your Margin account, just use it to lend in Binance Lending comfortably!
summary
Just now are the shares for you to answer the question of what is Binance Lending for yourself . Hopefully through this article you have received a lot of valuable information to put into practice. Binance Lending still has a very low risk as it is guaranteed by Binance. Brothers who have idle assets can choose this investment channel because the term is quite short and the safety is also high.
