7 Benefits of Binance SOL Staking with the New BNSOL Token
Good news for all crypto enthusiasts! Binance is introducing a cool new feature: Binance SOL Staking. That allows you to stake your SOL tokens for rewards and get a new token known as BNSOL. BNSOL makes it flexible in trading, lending, or other ways of using the staked SOL tokens while earning rewards.
You stake your SOL and get BNSOL in return. With the growth of your rewards, your BNSOL's value also grows. You can even use BNSOL on other DeFi platforms outside of Binance! This is a great way to make your SOL tokens work harder.
Our team of Crypto Accountants explains how Binance SOL Staking can help you make the most out of your SOL!
What is Binance SOL Staking?
Binance SOL Staking is a new service that Binance offers, which allows you to get rewards for staking your SOL tokens directly on the platform. You will receive a liquid staking token called BNSOL, representing your staked SOL. BNSOL is quite versatile. While earning staking rewards, you can still trade, lend out, or provide liquidity with your BNSOL.
Binance SOL Staking lets you unlock the value of your staked SOL tokens without having to give up the tokens or access them. In this case, as the rewards accrue, the value of BNSOL would increase in proportion to the SOL, thus offering both liquidity and continued rewards.
Furthermore, BNSOL is not limited to Binance. You can use it on other DeFi platforms. That makes it a flexible option for maximizing your assets.
How Does Binance SOL Staking Work?
Let’s walk through the steps of staking, earning rewards, redeeming, and withdrawing your staked SOL on Binance.
1. Staking SOL
When you stake your SOL tokens on Binance, you receive BNSOL in your Spot Wallet. The amount of BNSOL you receive depends on the current conversion ratio between SOL and BNSOL. This ratio reflects the value of your staked SOL plus any accumulated rewards.
You can check this ratio on the Binance SOL Staking page to know exactly how much BNSOL you will get.
2. Earning Rewards with BNSOL
Each BNSOL token you hold equals one staked SOL plus the staking rewards earned since staking began, with rewards starting from August 26, 2024.
As more rewards accumulate, the value of BNSOL grows beyond that of SOL. This growth is tracked through the conversion rate between BNSOL and SOL. It is updated every Solana epoch (approximately every two days) to reflect the new rewards.
3. Redeeming BNSOL for SOL
You can re-invest your BNSOL into SOL using the available conversion ratio. There is usually a ~4-day wait between the time you have requested the redemption and you get your SOL.
This is part of the normal unstaking process, so plan your redemptions accordingly.
4. Withdrawing BNSOL to Other Platforms
You can use your BNSOL tokens not only within Binance but also on other DeFi platforms.
It still earns staking rewards even when you transfer BNSOL to an external wallet, like the Binance Web3 Wallet.
To withdraw BNSOL, you will follow the regular process for withdrawing digital assets from your Binance account. It makes it easy to move your staked assets wherever you need them.
How do you get started with Binance SOL Staking?
Here's a step-by-step guide to start using Binance SOL Staking:
Stake your SOL tokens on Binance and receive BNSOL tokens in your Spot Wallet.
If you haven't, create and back up your Binance Web3 Wallet.
This function transfers through the ‘Transfer’ button via your Binance Web3 Wallet, introducing functionality to transfer BNSOL tokens from the user's Spot Wallet into their Binance Web3 Wallet.
Use the ‘Discover’ feature in your Binance Web3 Wallet to find decentralized applications (dApps) where you can put your BNSOL to work.
Benefits of Binance SOL Staking
Crypto Accountants explains the benefits of using Binance SOL Staking:
1. Unlock Liquidity
One of the main features that make Binance SOL Staking advantageous is the ability to keep using your SOL tokens even if they are staked.
Traditionally, when you stake your tokens on the Solana Network, they become locked up for a stipulated period and thus are inaccessible to the owner of these tokens.
Although Binance gives you back a liquid staking token called BNSOL, it allows trading, lending, and providing liquidity without losing access to your staked SOL. This flexibility is not available with traditional staking.
2. Earn Staking Rewards
When holding BNSOL through Binance SOL Staking, your tokens can compound in value over time because of the staking rewards.
The other staking will freeze your assets and render them inaccessible for a set period. Conversely, Binance SOL Staking gives you a more fluid approach toward accessing the value of your staked tokens at any given time.
3. Flexible Redemption
Binance SOL Staking provides multiple ways to redeem your staked assets, catering to different needs:
Quick Access: You can sell your BNSOL for SOL on the spot market for immediate access to your funds.
Redemption Period: Alternatively, you can redeem your BNSOL at the current conversion rate on the Binance SOL Staking page, which may involve a redemption period of up to 4 days.
4. Diverse Utility
BNSOL is not just for holding. It can be used across various Binance services and other DeFi platforms, maximizing the potential of your staked SOL. Here are some ways to use BNSOL:
Liquidity Farming: Stake BNSOL on DeFi platforms to participate in liquidity farming, lending, borrowing, or restaking.
Trading: Trade BNSOL on the Binance spot market or use it as collateral for margin and futures trading (these features will be available after the official release).
Crypto Loans: Use BNSOL as collateral for crypto loans, allowing you to borrow funds while still earning staking rewards on your SOL.
5. Simple, One-Click Staking
Binance does not cause hassle for any user, even for a beginner. You can stake your SOL with one click and get your reward without further action.
Setting up anything or taking extra steps is unnecessary; it is easy for anyone.
6. Trusted Platform
Binance is one of the most recognized global platforms and is also recognized for reliability and safety.
Staking your SOL on Binance assures you of its safety, and excellent support shall be accorded to you whenever needed.
Read more: How to Do the Cryptocurrency Trading the Right Way?
7. Enhanced Security
Binance's SOL Staking makes use of the Solana Labs-developed Stake Pool Program. It has gone through auditing and validation by numerous security companies and liquid staking token providers.
This ensures the safety of your funds at any time.
How to Start with Binance SOL Staking?
Getting started with Binance SOL Staking is simple:
Stake SOL: Stake your SOL tokens on Binance and receive BNSOL tokens representing your staked SOL.
Earn SOL: Hold your BNSOL to earn staking rewards automatically.
Redeem SOL: When you want to cash out, redeem your BNSOL for SOL at the current conversion rate.
To prepare for the launch, ensure you have SOL in your Binance account, and get ready to stake with just a click!
Final Thoughts!
Binance SOL Staking provides the easiest and most secure way to realize flexible, liquid rewards from your SOL tokens.
Whether you are new to staking or a power user, Binance SOL Staking will help you with your staking game.
Stay tuned for the official launch, and prepare for full-speed staking with Binance! For more information, reach out to the Crypto Accountants.