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What is DeFi Staking?

Decentralized financial platform staking is simply understood as an investment activity that seeks passive income through digital assets by taking advantage of the benefits brought by a decentralized financial platform.

Staking in centralized and decentralized markets has different operating mechanisms. Before the advent of DeFi platforms, staking was understood as a process of authorizing organizations (such as exchanges, investment funds, etc.) to perform transactions or create new blocks and people. Users will receive corresponding rewards. Users will have to lock cryptographic assets in smart contracts in order to become validators in DeFi or blockchain protocols and earn profits by fulfilling platform requirements with DeFi Staking.

However, at present, decentralized financial products are still quite unfamiliar to crypto investors, especially those who are new to the market. Therefore, to make it easier for users to access DeFi projects, the Binance exchange has provided a feature called DeFi Staking. With this feature, users can easily stake crypto assets stored in wallets on the exchange and earn profits through a few simple operations.

The Advantages of DeFi Staking

We know that most of the decentralized platforms today use the proof-of-stake consensus mechanism. Participants in staking will be required to lock a certain amount of crypto assets in DeFi platforms in order to monitor transactions and receive rewards for doing so. Or more precisely, validators will have the right and obligation to approve or cancel transactions made in the network. Therefore, to ensure the process is safe and easy, Binance has provided the DeFi Staking feature with some outstanding advantages, such as:

  • Generate Higher Passive Income: Similar to other staking activities, DeFi Staking also helps you generate a passive income source by locking cryptographic assets. In particular, with DeFi Staking, users will not have to pay some accompanying fees and still receive optimal profits.
  • When using the DeFi Staking feature on Binance, you will not have to perform complicated tasks such as verifying transactions, searching for projects, opening on-chain wallets, etc. Perform a few simple operations according to the detailed instructions on the floor.
  • Asset Safety: Binance has a team of experts to analyze and select the most potential DeFi projects and monitor and analyze them through tools to reduce risk.

The Drawbacks of DeFi Staking

Any investment that takes place in the cryptocurrency market as well as the traditional financial market involves certain risks. And so is DeFi Staking.

  • When participating in DeFi Staking, users will have to lock crypto-assets in a smart contract on the blockchain for a certain period of time. As a result, users will be exposed to risk when the price of the crypto asset fluctuates. At the same time, the early withdrawal process is also quite complicated and takes a long time, as well as incurs other costs. Therefore, users need to think carefully before choosing a time to participate in DeFi Staking.
  • Asset safety risks: Although Binance has an advanced security system, the platform does not commit to being responsible in the event of a hacker attack. At the same time, Binance is only an intermediary to introduce DeFi projects, so users will be held responsible if the projects are not good or fraudulent.

A Step-by-step guide to DeFi Staking on Binance

To participate in DeFi Staking on Binance, you need to prepare an account on this exchange as well as the amount of cryptocurrency you wish to stake. Then, to participate in the DeFi Staking on Binance, follow the instructions below.

Step 1: On the main interface of the account, select the “Finance” tab and then click “Binance Earn.”

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Step 2: Next, click “High Yield”.

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Step 3: The DeFi Staking section appears, then you choose the appropriate projects.

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Step 4: After you have selected the project you want to participate in, click “Stake Now” in that project.

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Step 5: In this step, you choose the form you want to join (Flexible or Locked), the time to lock the encrypted assets, the number of encrypted assets and then check the box “I have read…”. Then, click “Confirm purchase” to complete the steps to participate in DeFi Staking.

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To check the projects that you have participated in DeFi Staking on Binance, at the main interface of the account, click “Earn” on the “Wallet” tab. Then, click on the “DeFi Staking” item to view detailed information about the participating projects.


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