BNB Staking: What To Know & How To Get Started
Cryptocurrency has dominated the mainstream world over the last few years, and at this point, not a day passes in which there isn’t some mention of Bitcoin or Ethereum on the news or in other media. But while ETH and BTC are big names in the crypto market, there are plenty of other token options. In fact, one cryptocurrency that shows tons of promise is BNB, the native token of the Binance ecosystem.
A large part of why BNB has exploded in popularity is that it’s the coin that powers the Binance Chain ecosystem. Binance is the largest cryptocurrency exchange in the world — and is one of the top platforms to explore when you’re looking for opportunities to earn high rewards for staking. This platform supports nearly 100 staking options, covering a wide range of projects and APYs, including BNB.
If you’re looking for an opportunity to maximize your returns, staking your BNB assets may be a good option, especially if you use the Binance platform. But before you get started, it’s important to understand how BNB staking works and the possible pros and cons of staking your tokens to earn returns.
What Is BNB?
The BNB token is a type of cryptocurrency that is native to the Binance exchange. It trades under the symbol BNB. While BNB is closely associated with the Binance platform, it wasn’t always. Interestingly, BNB was first created as a utility token that could be used for discounted trading fees on the Ethereum network.
It has since transitioned to become the native currency of the Binance blockchain, and, in turn, the token’s use has expanded. These days, BNB can be used for payments on Binance Chain transaction fees, as well as travel booking, entertainment, online services, and financial services.
You can also get a few big — and unique — benefits if you hold BNB on the Binance network. This includes some pretty nice discounts if you pay your trading fees in BNB. For example, you can save 25% on spot and margin trading fees by using BNB, and you’ll get a discount of 10% on your futures trading fees, too. That perk can make the cost of trading a lot cheaper — especially if you’re doing high-volume trading.
How Does BNB Staking Work?
Staking is one of the most popular ways for crypto holders to maximize the returns on their crypto assets without trading or lending. By staking your BNB, you are allowing the exchange to temporarily use your tokens to support the operations of the Binance blockchain network.
When you stake BNB, the tokens are used toward securing the asset’s Proof-of-Stake (PoS) network. As long as the assets remain staked, they’ll be used to verify transactions on the network, facilitate decentralized governance, and improve the network’s resilience.
In turn, you earn rewards in the form of tokens, which are meant to incentivize you into allowing the use of your tokens over a longer term. That said, staking BNB can work in many different ways, including the following.
Staking BNB on an Exchange Platform
You have the option to stake BNB on platforms like Binance, Coinbase, Kraken, and numerous others. That said, the rate of return on the tokens you stake will vary based on numerous factors, including the time frame in which you stake the tokens, the platform you choose, and other factors.
Staking BNB in a Hardware Wallet
There is also the option to stake BNB through a hardware wallet. Staking through a hard wallet generally comes with a lower risk than staking on a centralized exchange because you’ll maintain control over your digital assets.
Staking BNB in a Software Wallet
Your BNB tokens can also be staked via a software wallet. Using a software wallet to stake BNB can be a simple solution if you’re ready to start earning rewards, and unlike a hardware wallet, it won’t require any extra equipment or purchases upfront. There are numerous options for staking BNB with a software wallet, including Trust wallet, which has historically offered a high APY on BNB staking.
Stader
4.3Pros
- Committed to decentralized staking
- MATIC staking on Polygon
- 40+ Protocol integrations to enhance yields
Cons
- Limited liquidity for Stader liquid tokens
- Primary liquidity pools pair liquid tokens with Stader SD token
- Support for MATIC staking on Polygon: Staking MATIC must be done on the Ethereum network, which can be costly. Stader Labs introduces the ability to stake MATIC on the Polygon network, opening a yield opportunity for smaller positions.
- DeFi integrations: Put your staked assets to work in other DeFi protocols to boost your yield. Options vary by chain and include liquidy pools, lending platforms, and yield optimizers.
- Newbie-friendly UI: If you know the basics of working with a DeFi wallet like MetaMask, Stader makes it a breeze to stake assets like MATIC and ETH with a liquid token.
DeFi can be intimidating if you’re new to the space, but Stader’s user interface and flow for basic liquid staking help both newcomers and seasoned pros put their crypto to work in a jiffy. Smart contract audits from Halborn and Certik help ensure the code is solid, reducing the risk of exploits.
BNB Staking Time Commitment
The time commitment for staking varies by exchange and platform. In some cases, you may not be required to stake your tokens for a certain period of time, but some exchanges may require it. Locked staking is staking that requires you to commit to a certain amount of time in which you’ll keep your tokens staked, while flexible staking does not.
In general, though, the typical time commitments required for staking BNB can include:
- 7 days
- 15 days
- 30 days
- 60 days
- 90 days
- 120 days
- 365 days
Potential Returns For Staking BNB
While the returns for staking your BNB tokens can vary, sometimes significantly, depending on where you stake your tokens, the number of tokens you stake, and the term you choose. Whether or not the interest compounds will also impact the amount you can earn when staking your BNB tokens.
For example, if you stake your BNB on Binance, you can stake for 30, 60, 90, or 120 days. The 30-day staking APY was 4.09% as of late August 2022, while the 120-day staking rate was much higher at 12.99%, which would mean a significant difference in returns.
Let’s look at some of the earning potential when staking BNB, outlined in the chart below.
Read our complete guide to earning yield on crypto for more strategies.
How much can you make for staking BNB (Binance)?
| Staked Amount | APY* | Duration | Potential Earnings |
|---|---|---|---|
| $500 Of BNB | 5.86% | 30 days | $29.30 |
| $500 Of BNB | 5.78% | 60 days | $28.90 |
| $1,000 Of BNB | 8.69% | 90 days | $89.00 |
| $5,000 Of BNB | 12.99% | 120 days | $649.50 |
| $10,000 Of BNB | 5.86% | 30 days | $586.00 |
*Rate information current as of August 2022
What to Know About Returns For Staking BNB
While the returns for staking BNB will vary depending on a range of factors, in most cases, you will begin to earn rewards at a steady rate once your BNB tokens are staked. For example, the Binance platform calculates staking rewards daily. It pays out the rewards monthly to users who have their tokens staked on the platform. Some platforms may also charge fees for staking BNB, which will also vary.
Pros And Cons Of Staking BNB
Pros
- Potential for high returns on staked assets
- Safe way to earn on your BNB tokens
- Retain ownership of your tokens
Cons
- Highest rewards rates can require long staking terms
- Market volatility can be risky
Pros And Cons Explained
Pros
Potential For High Returns
Depending on the platform you choose, you can earn high rewards in return for staking your BNB tokens. For example, Binance pays up to 12.99% returns on BNB tokens staked for at least 120 days, which is much higher than the rates you may receive for staking many other types of tokens.
Staking Is Generally Safe
While the crypto market is typically volatile, staking is generally safe. Any reputable exchange you stake on will typically have safety measures in place to protect from losses. When you’re done staking your tokens, you can withdraw them to your wallet — along with the returns you made for staking your tokens.
Retain Token Ownership
When you stake your BNB tokens, you aren’t granting the exchange or platform ownership of your BNB. You’re simply allowing the blockchain to have temporary access in order to use your tokens to help complete transactions. This keeps the control in your hands.
Cons
Highest Rewards Rates Can Require Long Staking Terms
Not all staking requires you to commit to a long staking term. But to earn the best rewards rates, you typically have to commit to staking your tokens for longer. That can be less than stellar if you need access to your BNB tokens while they’re still staked.
Market Volatility Is A Risk
Crypto prices tend to be highly volatile, and the value of your BNB assets could plummet in value — or increase rapidly — while staked. Under normal circumstances, you may opt to sell your assets if the price reaches a high point, but you won’t have access to your tokens during that time. That, in turn, could make staking a much less profitable endeavor if you miss the window of opportunity to sell.
Is It Safe To Stake BNB?
There will always be a risk when it comes to crypto, but staking BNB is typically a safe bet. The main risk you could face with staking BNB is volatility. As with any digital asset, prices can be volatile, and if they skyrocket or fall when your tokens are staked, you could risk losses with no real recourse to resolve the issue until you unstake your tokens.
Another potential risk is slashing on the BNB network, which is built into the blockchain protocol to discourage validator misbehavior. If the validator or exchange you use exhibits harmful behavior, it can cause a percentage of the staked tokens to be slashed or lost as a penalty.
As such, this can also cut into your profits — and may cause the loss of some of your staked tokens. Luckily, you can reduce some of the risks of slashing by choosing a reputable validator or exchange, so be sure to do your research beforehand.
Is Staking BNB Right For Me?
In general, staking BNB can provide an excellent opportunity to earn on your tokens, but it may not be the right move for everyone.
Who Can Benefit From Staking BNB?
If you aren’t planning to use your BNB tokens in the near future, or if you have plans to hold onto your tokens, staking can be an excellent investment. While the staking terms can be as short as 7 days, staking is generally best for people looking for long-term investments and those who don’t need immediate access to their tokens.
Who Might Want To Avoid Staking BNB?
If you’re going to need access to your tokens in the near future, you may not want to stake your BNB. Or, if you’re worried about market volatility and want to capitalize on the right opportunity to sell, staking your tokens may also be the wrong move. The highest APYs are typically paid on long, fixed staking terms, so you’ll have to be willing to lock up your tokens if you want to earn big when staking BNB.
Final Thoughts On Staking BNB
If you’re looking for a way to earn both easily and safely on the BNB tokens in your wallet, staking them could be a good option. Putting your tokens to work while helping validate transactions on the Binance Chain is a safe way to earn rewards — especially if you have extra tokens in a crypto wallet. If you’re going to need your BNB tokens at some point in the near future, though, staking them may not be worth the hassle. You typically earn the highest rates in return for longer staking periods, so staking BNB can be much more lucrative for someone willing to lock their tokens away for longer periods.
Frequently Asked Questions
If you’re looking for a crypto investment, BNB can be an excellent option for the right person. Due to the ongoing developments within the Binance ecosystem, the blockchain’s native token continues to have an optimistic and bullish future.
The requirements for staking vary by platform or exchange, so it’s tough to say how much BNB you need in order to stake your tokens. If you want to stake your BNB, your best bet is to check the requirements of each wallet or platform that offers BNB staking to determine the minimum you need in order to stake your tokens.
Staking BNB or any other token on Binance is typically safe. Binance has numerous safety measures in place to protect your assets when they’re staked on the platform — which reduces the risk to users. This means the number of tokens a user staked will be returned to their wallet. Due to the fluctuation of the fiat value of the staked tokens, you may have no recourse for any losses.
