Binance Earn Fully Explained (High-Interest Products and Precautions)

Did you know you can earn returns on the Binance exchange without trading? Let me introduce the Earn financial products offered by Binance.

Starting with the most basic savings, you can use products such as staking, Launchpool, Liquid Swap and BNB Vault to earn higher interest than you would elsewhere. However, high returns always come with risk.

In this post, you'll learn everything there is to know about Binance Earn.

How to Use Binance Earn

First, let's look at the most basic way to use Binance Earn. If you go to [Finance] > [Earn] on the Binance website, you'll see a page like the one below.

As you can see below, a huge number of products are listed. What we need to look at are two broad product groups: Guaranteed and High Yield.

At first glance, High Yield may look like the obvious choice, but don't forget that it comes with extra work or extra risk. So which product is the best choice? Let's go through them one by one in detail.

1. Guaranteed Earn Products Explained

Binance's guaranteed products offer an annual percentage yield (APY) of around 1–7%, but they guarantee your principal. Since the quantity of the assets you hold is guaranteed, you can consider the risk to be almost zero (excluding the risk from coin price fluctuations). With guaranteed products, you get your principal back along with interest after a set period. Binance Earn offers the following principal-guaranteed products.

• Savings
• Locked Staking
• Launchpool
• BNB Vault
• ETH 2.0 Staking

Let's take a look at them one at a time.

1-1. Binance Savings

Binance Savings comes in two main types: Flexible Savings and Locked Savings. Flexible Savings lets you deposit any amount you like, receive interest every day (paid from the second day after depositing), and redeem whenever you want.

Locked Savings also lets you deposit any amount you like, but interest is paid at maturity, and you have to keep the deposit for a fixed period. Naturally, Locked Savings pays more interest than Flexible Savings.

• Recommended for: holders of idle stablecoins such as USDT and BUSD, and other coins

1-2. Binance Locked Staking

The next product is Locked Staking. You might think Locked Staking is similar to savings. From the perspective of the user depositing coins, it may feel the same, but the difference is that it involves an actual staking process that locks the coins on the blockchain network. In other words, with Locked Staking you take part, through staking, in the Proof of Stake (PoS) process that keeps the network running.

With Locked Staking, you stake coins for a period such as 15, 30, 60 or 90 days, and when the period ends you get the coins back along with interest. Yields vary from 10% to 50%.

The first thing to watch out for with Locked Staking is the risk of the coin's price moving, plus the fact that redemption can take anywhere from a few days to a few weeks. As mentioned above, this is because Locked Staking interacts with the actual blockchain network, and each network has a different processing time.

• Recommended for: long-term holders of a specific coin

1-3. Binance Launchpool

Launchpool lets you stake tokens such as BNB and USD to earn new tokens. It only opens for specific periods, and tokens launched through Launchpool get listed on the Binance exchange. Yields vary widely by coin, and some projects have recorded returns of several hundred percent. If you'd like to join a Launchpool, please refer to how to join Launchpool.

• Recommended for: holders of idle BNB, BSUD and other eligible coins

1-4. BNB Vault

BNB Vault is a product where you deposit BNB and receive interest and various tokens. You could call it a vault just for BNB. When you put BNB in the vault, Binance automatically puts it to work in Launchpool, Savings, DeFi Staking and more. The yield can jump sharply in the short term, but when there are no special projects running it tends to be low, under 1%.

• Recommended for: anyone holding BNB that isn't being used for savings, staking, etc.

1-5. ETH 2.0 Staking

ETH 2.0 Staking is a product where you stake Ethereum and receive rewards. Ethereum recently completed the switch of its consensus algorithm from Proof of Work (PoW) to Proof of Stake. ETH 2.0 Staking, where you deposit Ethereum and earn interest as a validator, is currently underway. The current rate is roughly 5% per year.

The catch is that staking ETH on your own requires 32 ETH. However, exchanges like Binance pool users' funds together and stake them all at once, so you can participate with as little as 0.1 ETH. For more details on ETH 2.0 Staking, please refer to this post.

• Recommended for: long-term Ethereum holders

2. High-Yield Earn Products

Next up are the high-yield Earn products. Higher returns are of course nice, but always remember that high return = high risk. Binance Earn's high-yield products include the following.

• Liquid Swap
• DeFi Staking
• Dual Investment

Starting to get a headache? Don't give up yet, and go through them one at a time. With the right product, you can earn a yield of over 10% per year. Above all, the best product for you might be right here.

2-1. Binance Liquid Swap

Liquid Swap is a pool of funds that uses an automated market maker (AMM) model. Users deposit funds into the pool and can earn the trading fees and interest it generates. The interest rate is around 10%–20%.

One thing to note: if you join a pool with something other than stablecoins, you face coin price fluctuations and a concept called impermanent loss. If you'd like to learn more about how Liquid Swap works and this concept, please refer to my post explaining Liquid Swap.

• Recommended for: stablecoin holders and long-term coin holders who understand Liquid Swap

2-2. Binance DeFi Staking

The next product is DeFi Staking. It's so popular that it can be a bit hard to get in. It's a somewhat risky staking product where funds could be lost due to on-chain contract security issues. The interest rate is around 10%–18% for stablecoins, which is pretty decent.

Since this product is also staking, the funds are locked directly on the network, so redemption can take several days or more. Because it's a DeFi-related product, I recommend checking out my earlier post on DeFi scams before participating, and you'll need a basic understanding of DeFi products.

• Recommended for: stablecoin holders who understand DeFi (individual limit of roughly 5,000 USD equivalent)

2-3. Binance Dual Investment

Dual Investment is a product that reliably shows up whenever coin prices swing sharply. The mechanism is a bit complicated. You deposit assets at a certain point, and on the delivery date you get back either BTC or BUSD based on the settlement price.

Which one you get back depends on the strike price, and it offers powerful yields of roughly 13%–100% on an annual basis. Keep in mind that these yields are annualized. A 100% annual rate converted to 7 days works out to an interest rate of about 1.89%.

• Recommended for: stablecoin holders and BTC holders who understand Dual Investment products

Final Summary

That wraps up our look at the guaranteed and high-yield products offered by Binance Earn. Here's everything summarized once more in a table. Take a look at the table and decide on the best product for you.

Finally, here's a 20% discount link for signing up to the Binance exchange. With this link, you get a lifetime discount on fees when buying and trading crypto assets for Earn products. Enter the code via the link below when you sign up and you'll get 20% off.

Create a Free Account | BinanceRegister an account on Binance nowaccounts.binance.com ↗