[Binance] The easiest way to stake Ethereum: Summary of risks and advantages / disadvantages

2021/3/172021/12/2

Ethereum (ETH) has added Proof of Stake (PoS) functionality with the December 2020 ETH 12 update. At PoS, you can get rewards for staking ETH.

In this article, we have summarized the features, methods, advantages / disadvantages and risks of ETH staking in binance.

What is ETH staking?

Staking system

Proof of Stake was introduced to operate the Ethereum network more efficiently..

In ETH1.0, instead of the "minor" who approved the transaction, the "validator" who holds a certain level of ETH guarantees the security of the network.

The conventional proof of work (PoW) consensus algorithm was concerned about the environmental load of mining, which consumes a huge amount of power, but it is said that the power consumption can be reduced by 99% by moving to PoS. ..

reference:What is crypto asset Ethereum staking?Summary of the main points of the next large-scale upgrade "Ethereum 2.0"

Rewards for staking

If you stake ETH, set up a validator and approve the transaction, you will receive ETH as a reward.This reward will vary depending on the total amount of locked ETH.The expected yield as of March 2021 is 3% per annum on an ETH basis.

Risk of staking

Currently in the transition stage, but for ETH 2.0 staking,

• Staken ETH cannot be removed for 1-2 years before the shard chain is installed
• At least 32 ETH is required to be a validator
• Varidata must always be online and there is a penalty for losing some of your holdings if you violate it

There are restrictions such as, and it is a little hurdle to do individually.

Therefore, there are services such as "Staking Pool" where you only need to set up a validator on your behalf and deposit ETH, and we also provide binance as well.

Unfortunately, no domestic exchange currently supports Ethereum staking.

ETH staking in Binance

What is Binance?

A cryptocurrency exchange that boasts the largest trading volume in the world.There is also a branch office in the United States, Binance US.

By cyber security companyCryptocurrency exchange security rankingIn 1st place: Kraken, 2nd place: 15rd place after Coinbase Pro (domestic exchanges are ranked XNUMXth in BitFlyer at the highest).

The official page is ↓

Features of ETH staking in Binance

• If you steak ETH, you will get the same number of "BETH".
• "You can receive staking rewards according to the amount of "BETH" you have.
• After the main net release of ETH 2.0, "BETH" can be redeemed XNUMX: XNUMX to ETH.
• "BETH" can be traded with "ETH" at any time on the exchange (exchange rate depends on market price)

The BETH you receive can be exchanged for ETH at any time, so you can exchange it when you want other coins, or you can stable coins via BETH → ETH → USDT in the event of a crash.This is a major feature of ETH staking in Binance.

Merit

• You don't have to operate the node as a validator yourself
• You can get rewards without 32ETH (OK from 0.001ETH)
• All staking rewards are distributed to users (zero commission)

I think that the service is too good that there is no fee for proxy and maintenance of Varidata. Perhaps it means "trade that much".

Demerit

• BETH can only be used on Binance Smart Chain
• The BETH⇔ETH exchange rate on the exchange varies from 0.90 to 1.00.
• Exchange risk (such as not being able to manage Gox or private keys yourself)

BETH can only trade and withdraw within exchanges and cryptocurrency wallets (binance, trust wallet, metamask, etc.) that support Binance Smart Chain (BSC). Depending on the rate of the BETH / ETH pair, the number of cards you have may be reduced by exchanging.

Also, since you are not registered as a virtual currency exchange company in Japan, you are completely at your own risk.
reference:[Inquiry] Binance warns from the Financial Services Agency!Is the use of overseas exchanges prohibited in the future?

How to stake ETH with Binance

The overall flow is just XNUMX steps.

1. Register with Binance
2. Deposit ETH
3. Steak ETH

➀Binance OfAccountTo register.
(From here, 10% of the transaction fee will be kicked back in the referral campaign. Please do not hesitate to contact us.)

Please refer to the official help for how to register for Binance ↓

Set up security measures such as two-step verification, SMS verification, and withdrawal white list.

② Transfer ETH to the Binance wallet.

There are two ways to procure ETH, but if it is 2 yen or more, the former will bear less fees.

• Purchase ETH from a domestic exchange (bitflyer, bitbank, etc.) and send it to your Binance wallet.
• Purchase directly with a credit card (Visa / Mastercard only)

Credit card purchase is not a rip-off price like a certain domestic sales office, so I think that it is an ant if you want to try from a small amount or if you are worried about the remittance procedure.

③ When ETH is deposited, select "binance earning"-> "ETH 2.0 staking"-> "Stake Now" from "finance" at the top of the page.

Enter the amount of staking and press "Confirm" to display the notes.

The notes are the contents explained so far, but after understanding, "confirm" again.

If successful, this will be displayed.

Confirmation of reward

You can check the reward obtained by PoS from "Distribution record".It is properly distributed every day.

The staking reward will be paid in "BETH" according to the "BETH balance" in the physical wallet.
(BETH is deposited in a liquidity swap and cannot be used in other conditions)

The balance will be counted from the day after the day you apply for staking (holding), and the reward will be distributed from the next day (3rd day).

Not just the amount that was originally lockedBETH distributed every day is added to the base that determines the distribution amount for the next day, so it is a nice mechanism considering the effect of compound interest.

How to get more ETH with staking

There are other ways to get rewards besides the regular staking methods described above.

that isTrading with a BETH / ETH pair in Binance and owning BETHis.In the original method, the conversion from ETH to BETH is completely XNUMX: XNUMX.On the other hand, in the BETH / ETH pair on the exchange,If the timing is right, you can exchange for 1 ETH = 1.05 to 1.10 BETH, so you can deposit more ETH.

Since the reward is based on the "BETH balance", you can receive the reward with this method without any problem.MoreoverWhen you can redeem ETH, you will be back with 1 BETH = 1 ETH(There is information on the person who contacted Binance directly in the comment section).

The above is a summary of ETH staking in Binance.

→ Take a look at the official Binance ETH staking page