Main Takeaways
Binance Earn’s self-sufficient business model provides reasonable rewards and avoids over-subsidization.
Binance Earn has a balance of liquid and locked offerings.
Users can readily access top-class educational materials through the Binance Earn site.
Increased market volatility is a natural time for investors and traders to reassess their positions. Whether the market is up or down, you should always consider your appetite for risk.
In challenging market conditions, many of you will probably find yourself in this position and reflect on the best choices to make. Before committing to any decision, you should carefully consider your risk appetite. Whether you’re simply HODLing crypto, staking it, or in a futures position, it’s basic risk management to take stock.
If you’re already a Binance Earn user, we’re here to help. Let’s break down some of the risks involved with the service. What Is Binance Earn?
Binance Earn is a world-leading crypto reward platform. Its wide selection of products is suitable for first-time users through to crypto natives. As such, it’s become a mainstay for Binance users who want to earn rewards without leaving the Binance ecosystem.
How Binance Earn Has Created a Trusted Platform
Even in volatile market conditions, Binance Earn enables users to generate crypto rewards. Binance Earn manages its risk in the following ways:
No subsidies
Reasonable reward rates are vital in creating a model that operates without the need for external funds. Aside from sponsored rewards (provided as additional bonuses to selected products), each product is self-sufficient, and no subsidies are required to run them. Binance Earn achieves this by actively monitoring and adjusting reward rates, accounting for many variables such as on-chain staking rewards, and balancing business needs and utilization by Binance’s operations. These facts make Binance Earn a sustainable platform with a self-sustaining operating mechanism.
Appropriate risk controls
Appropriate controls are in place to manage risk. For example, Margin and Crypto Loans must be over-collateralized, and Binance actively manages asset utilization by each business unit in the Binance Group.
User education
Binance Earn informs its users how they can responsibly use our services through the platform. From FAQs to tutorial videos and Binance Academy articles, its users have multiple ways to learn about informed investment-making.
Learn About Selected Binance Earn Products
Our platform offers a range of products. Please read and consider our brief descriptions below. As always, more information is available via the Binance Earn website and our educational materials.
ETH 2.0 Staking
Binance ETH 2.0 Staking aims to provide an easy way for users to earn rewards using ETH.
Reducing the minimum amount needed to earn rewards
Compared to on-chain staking, users don’t need to provide 32 ETH to generate rewards using ETH. Users can earn rewards with as little as 0.0001 ETH on Binance Earn.
Protection from penalties and slashing
Binance is required to return digital assets to you. This reduces the risk of losses arising from digital assets being subjected to slashing or a penalty. These occur when the nodes engage in malicious activity or experience downtime. See our for more details.
Providing liquidity for locked ETH 2.0 staking
Locking your crypto increases risk as you cannot move the assets if market conditions change. ETH deposited for ETH 2.0 staking is locked, but Binance Earn provides all participants with transferable BETH tokens. These can be exchanged 1:1 with ETH once the Ethereum developers enable on-chain ETH withdrawals. BETH unlocks your liquidity and can reduce the risk associated with locking your tokens.
In the meantime, the BETH/ETH pair is also tradeable on Binance Spot Market. However, the market determines the exchange rate of BETH/ETH, meaning it’s subject to price fluctuations. Rewards are also calculated based on the BETH in your wallet. If you trade BETH for ETH, you will no longer receive staking rewards.
Simple Earn Products
Flexible Products are always redeemable
Users can subscribe and redeem assets anytime while earning daily rewards. This principle means your assets remain liquid and available to be used at any point.
Locked Products can be redeemed at any time
Binance Earn users subscribed to Locked Products don’t have to worry about the risks associated with locking their funds. Assets can be removed anytime, but you will lose out on your accumulated rewards.
Where Do Binance Earn Rewards Come From?
Different Binance Earn products each have their own mechanism enabling them to pay users daily rewards.
Simple Earn Products
Binance provides users with rewards from its own funds. User-deposited assets in Simple Earn products are used for a variety of purposes. Some examples are:
Users’ assets deposited in Flexible Products may be used in other Binance business operations. These include the loaning of digital assets to other Binance users through Crypto Loan and Margin products. These assets are subject to the risk controls described above.
Binance may also stake users’ deposited Simple Earn assets on Proof of Stake (PoS) networks or official on-chain staking pools under fixed-term products.
From time to time, Simple Earn offers may be also sponsored by the token partners. Additional cryptocurrency rewards may be made available to users when this occurs.
Regardless of whether your digital assets are used to generate staking rewards, loaned to Binance users, used for any other purpose, or not used at all, Binance is obliged to return all your digital assets and rewards.
Liquidity Farming
Binance Liquidity Farming is a liquidity pool product developed based on the AMM (Automatic Market Maker) model. It consists of different liquidity pools, and each liquidity pool contains two digital tokens. Users can act as liquidity providers and deposit a pair of two tokens in equal amounts to the liquidity pool. Other users can use these tokens to perform a swap for a fee which is then given to liquidity providers.
Note that when you provide liquidity to liquidity pools, there is always the risk of impermanent loss. If the price of a token changes relative to the initial rate you deposited it at, the fiat value of your provided liquidity might be lower when you withdraw it.
Make Responsible Decisions with Binance Earn
It becomes easier to assess your portfolio’s risk with the correct information at hand. For those of you staked in Binance Earn products, our rundown of how we manage cryptocurrency and risk should prove valuable. If you require more information to help make an informed decision, you can always look directly at our product’s pages.
For additional information, please refer to the follow articles:
(Support) Binance ETH 2.0 Staking
(Support) Introduction to Binance Simple Earn
(Support) Get Started with Binance Simple Earn Flexible Products
(Support) Get Started with Binance Simple Earn Locked Products
(Academy) Your Guide to Binance Earn | Binance Academy
Risk notice: Cryptocurrency prices are subject to high market risk and price volatility. You should only invest in products that you are familiar with and where you understand the associated risks. You should carefully consider your investment experience, financial situation, investment objectives and risk tolerance and consult an independent financial adviser prior to making any purchase.
This material should not be construed as financial advice. Past performance is not a reliable indicator of future performance. The value of your investment can go down as well as up, and you may not get back the amount you invested. You are solely responsible for your investment decisions. Binance is not responsible for any losses you may incur. For more information, please refer to our Terms of Use and Risk Warning.
