BNB Coin Staking – Explained & Reviewed

BNB Coin Staking

In different crypto communities, BNB coin staking happens to be a hot topic these days. However, before we get into the specifics and explore it skeptically, let’s understand staking first.

What is Staking and How Does It Work?

See, in the world of cryptocurrencies, as the name suggests, staking happens to be a process of retaining your assets on the network. Therefore, while the possession of coins belongs to you, the operations on the network are supported by these coins. Since you are indirectly ‘offering’ your assets by locking them as collateral, you are rewarded by the network as well.

Conventionally, at most of the platforms, asset holders are allowed to mine the blocks depending upon the number of assets they possess. In return, you receive monetary benefits.

Exploring BNB Coin Staking

However, Binance has simplified the staking process and allows everyone to participate (even if you do not have the required technical knowledge).

Image result for bnb coin
BNB Coin Staking
Pros Cons
No need to set up a node Binance did not include BNB at the time of launch, thus diminishing the trust
No minimum amount required You have to keep the assets in hot wallets
No time lengths
Earn rewards from your stakes while working as a trader

Therefore, as explained by the CEO of Binance, users are not required to set up any nodes on the network. In fact, all they need to do is maintain the balance in the account (a limited number of coins are offered in this scheme). Moreover, the best part is that these assets never get ‘locked’ and you could trade them at any instance.

Thus, Binance has created two streams of income, allowing regular traders to earn passive income as well.

The Future of BNB Coin Staking

So, despite the fact that the staking industry is growing, experts seem shaky and divided when asked about the scope of BNB as there are plenty of factors to consider in its case. For instance, at the time of launch for Binance’s staking platform, BNB had been trading at roughly $15 (and above) for a couple of months. However, the exchange still did not list its native token and instead, started with the following coins:

  1. NEO
  2. Qtum
  3. Stellar
  4. Ontology
  5. Vechain
  6. Algorand
  7. Stratis

Comparing BNB and NEO

Please note that NEO token happens to be one of the best options in this niche and people often want to compare BNB coin staking prospects with that of NEO’s.

How Are They So Close? A BNB Oriented Analysis

First of all, one of the basic reasons is because the underlying architecture of both platforms resembles a lot. But, Binance is particularly known for burning their tokens.

See, the idea is pretty simple – the more the gap between demand and supply, the higher will be the price. Therefore, if the liquidity of BNB is kept higher, it would not be able to maintain a significant value as it has been doing for the last couple of months.

If NEO is known for giving out dividends for staking your coins, BNB has earned its name for maintaining the value of its native token by regularly burning the supply. However, please be advised that the latter is not meant to offer you any dividends.

See, if you are a crypto trader, you must already be aware that BNB is a very darling product of Binance and it is one of the reasons for their surging popularity. Since it is a native token, the platform is able to offer incredible perks and lure in the users. Therefore, even though they skipped BNB coin staking for the initial launch, it is impossible that they wouldn’t add it to the arsenal.

NEO vs BNB

Neo vs BNB

As you have developed a decent sense of both tokens now, let’s just have a look as to how staking would work on Binance’s mainnet for NEO as well as BNB.

NEO: The interest (for staking) is paid from the difference caused by inflation of the supply

BNB: The interest would be paid from the funds generated through transaction fees

Let’s understand it rationally. If let’s say, you possess 1% of NEO’s total supply, then staking would only prevent you from being a victim of inflation. You ‘seem’ to be gaining wealth, but actually, the value stays there and it just allows you to stay afloat during inflation.

However, in the case of BNB, since they are paying you the ‘real money’ generated through transactions, the overall value of your wallet increases and you do ‘earn’ something for staking the coins.

Conclusion

It is worth noticing that even though BNB coin staking is a pretty trending topic on Reddit and other forums, particularly after the launch of Binance’s unique staking feature, we have to see how long the exchange can continue with such huge claims. To clue you in, at the time of launch, they are not charging any staking fee and there is not any minimum threshold associated with the supported coins. Furthermore, they do not even bound you to keep the assets for a defined period.

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