How to Earn a Passive Income on Binance.com
A complete beginners guide to earning passive income with your crypto on Binance by introducing you to the Binance Earn system which involves staking, savings, liquidity pools, launch pools, mining and more.
The Oracle of Omaha also known as Warren Buffet once said: “If you don’t find a way to make money while you sleep you will work until you die”. This man is the god of investing and he knows what he is talking about. Making your money work for you to generate more money should be your ultimate goal. Luckily, the crypto world offers a lot of possibilities for this, and no place offers more opportunities than the largest Crypto exchange in the world: Binance.com.
What is Binance.com?
Binance.com is the largest crypto exchange in the world with regard to trading volumes and has been the highest ranking exchange for some time now. If you do not already have an account on Binance.com you can create one here and get a lifetime 10% trading fee discount:
Signup for Binance.com here (receive 10% fee reduction)
In addition to being the biggest platform it is also one of the absolute cheapest when it comes to fees. This includes trading fees, withdrawal fees, staking fees, transfer fees, and credit card deposit fees, all way below industry average.
On top of all this, you have the Binance Earn system which simply put is amazing, and is what you are here to learn more about.
What is Binance Earn?
Binance Earn is a section of the Binance platform where you can discover ways to further grow your portfolio. This is particularly interesting for coins and tokens that you have invested in with a long term perspective in mind. Basically, instead of letting your crypto sit idle you put it to work for the duration of its stay in your portfolio. The most common way of doing this is by Staking.
1. Locked Staking
If you have a long term perspective on your crypto investments it obvious that earning an interest on your investment is better than just having your funds sitting there and doing nothing.
What is staking?
By staking your coins you are supporting the operations on the specific blockchain network which in turn rewards you a certain percentage of your staked funds. The interest is always given in APY, which means “Annual Percentage yield”, so when Binance reports an APY of 7% if you stake your ADA on their exchange, this means that you get a yearly interest of 7%. The rewards are paid on a daily basis. Only the proof of stake (PoS) coins are stakeable on Binance and although Binance offers more staking options than other exchanges, they do not support all coins, as some coins can only be staked on their native app.
How do I stake on Binance?
The layout of Binance on your desktop browser is different from the mobile app but the staking options are just the same. See here how to access staking on both:
Desktop: Navigate to the top panel and proceed to click on “Finance” -> “Binance earn” -> scroll down and click “Locked staking”.
Mobile app: Make sure you are NOT on the “Lite” version. If you are then turn this off to access the full range of the app. When this is done navigate to “Home” on the main panel -> click “more” -> Navigate to Finance and click on “staking”.
You are now in the staking section no matter which device you use. Binance currently offers about 60 coins for staking which can be locked for 15, 30, 60 or 90 days. The longer you lock your coins the higher APY you get. I advise you to pick the longest available (There are limited staking spots). Don’t worry, your coins are not really locked as you can redeem your coins whenever you like, but you will lose out on the accumulated rewards during the lockup.
Find the coin you wish to stake, pick your staking time, enter the amount you wish to stake which is higher than the minimum staking amount, and then click “stake”. Your coins are now staked. Simple.
2. Defi Staking
Some coins are not PoS and thus not stakeable in the common sense, but on Binance you may still “stake” some of these coins. Currently binance offers 11 coins in Defi Staking.
What is Defi Staking?
There’s a relatively high threshold for users of DeFi products. Binance DeFi Staking acts on behalf of users to participate in certain DeFi products, obtains and distributes realized earnings, and helps users to participate in DeFi products with a single click. — This is how Binance explains it. In layman terms you are basically making your money available for margin trading. For this your money is safe, but Binance does not cover any losses in case of on chain security issues outside Binance control.
How to Defi Stake?
To locate Defi staking you do the same as for locked staking, but as this is “flexible” staking you do not pick the staking time, you simply stake.
3. Savings
Binance savings comes in two categories, flexible saving and locked savings, whereas the locked savings has a higher reward, but also a higher risk in that you cannot just redeem your coins and sell them. Nevertheless, if your investment horizon is several years it doesn't matter
What is flexible Savings?
Flexible Savings is your Crypto savings account. Subscribe your crypto to earn interest, with the flexibility to redeem your funds at any time. This option has low APY but is convenient for some coins which don't have a range of passive earning options. Long term XRP and LTC are both coins I have in flexible savings.
What is Locked Savings?
Committed to holding your crypto? If so you can subscribe and lock your crypto for a specific duration for a much higher interest. This option seems to either be very popular or just not offered at all times as several of these options are not available at the time of writing.
How to allocate crypto to Savings?
Desktop: Navigate to the top panel and proceed to click on “Finance” -> “Binance earn” -> scroll down and click “Savings”.
Mobile app: Make sure you are NOT on the “Lite” version. If you are then turn this off to access the full range of the app. When this is done, navigate to “Home” on the main panel -> click “more” -> Navigate to Finance and click on “Savings”.
When you have located the Savings section, find your coin on the list, click “transfer” or “subscribe”, enter amount you wish to put in, then click on “confirm”. If you wish you can also auto subscribe which means that you reinvest your rewards automatically.
4. Launchpool
On the Binance launchpad you can stake certain crypto for rewards in new coins launched in the Binance launchpool. This offer normally lasts for a month or so and new projects gets launched sporadically. You can also participate in the launchpool automatically from the BNB vault which will be explained in the next section.
What is Binance Launchpad?
Binance Launchpad and Launchpool are platforms that help and advise project teams on how to best issue and launch their token. Binance provides a full service offering starting from advisory services from before the token is even issued, to post-listing and marketing support. By staking some of your crypto on the launchpad you get your hands on some of these tokens that may or may not see substantial growth in the future.
How to earn tokens on the launchpad?
Navigate to the “Binance earn” section and click on “Launchpool”. In this section you will see the available tokens in the launchpool. You can always stake BUSD and BNB, but sometimes other tokens as well. An example of this can be seen in the above image where you can stake DOT and be rewarded ATA. Pick your token and the coin you wish to stake and simply click “Stake now”.
5. BNB Vault
As the name suggests this is a vault specifically created to store your BNB coins. BNB is of course the native token on the Binance ecosystem and have hundreds of usecases. If you have invested in BNB then the vault is not a bad place to store your coins.
What is BNB vault?
BNB Vault is a BNB yield aggregator. Depositing BNB means participating in Launchpool, Savings, Defi staking and other projects and at the same time gaining rewards.
How to deposit BNB to the vault?
Navigate to the Binance earn section and click on BNB vault. When you do you enter a page where you can read and learn about BNB and all its uses. To stake your BNB in the vault you simply click on “stake” and choose the amount of your BNB you wish to put into the vault. As seen from the picture above I have some of my BNB in the vault which is constantly generating me rewards from both Savings, and the launchpool. I choose to auto transfer my BNB to the vault.
6. Eth 2.0 Staking
Ethereum is moving from PoW (mining) to a hybrid of PoW and PoS (Staking) and if you have heard about ETH 2.0, this is that process. ETH 2.0 is said to be implemented within a few years.
What is ETH 2.0?
ETH 2.0 is the long-awaited upgrade to the Ethereum network that promises, among other things, to improve the network’s scalability, speed, efficiency, and sustainability without sacrificing security and decentralization. The ETH community aims to achieve this by rolling out several updates in three phases.
How to stake your ETH for ETH 2.0 on Binance?
Navigate to the Binance earn section and click on “Eth 2.0 staking” to get into the Eth 2.0 staking page. Click on “stake” and insert the amount you wish to stake.
!! Staking your ETH is is not like other staking. When you stake ETH you actually lock it away and get an equal amount of another token called bETH. In addition the interest you gain from your stake is also rewarded to you in the form of bETH. This staking is a one-way street until ETH 2.0 actually arrives, which in effect means that you cannot redeem your ethereum tokens until this happens. For long term investors this is no issue, but if you are a trader or wish to buy and sell your long-term ETH investments, then staking it may not be for you.
7. Liquidity Pool
Liquidity pools are one of the core technologies behind the current DeFi technology stack. They enable decentralized trading, lending, yield generation, and much more. These smart contracts power almost every part of DeFi, and they will most likely continue to do so.
What is a liquidity pool?
From Binance: Liquidity pools are one of the foundational technologies behind the current DeFi ecosystem. They are an essential part of automated market makers (AMM), borrow-lend protocols, yield farming, synthetic assets, on-chain insurance, blockchain gaming — the list goes on.
In itself, the idea is profoundly simple. A liquidity pool is basically funds thrown together in a big digital pile.
How do I earn from Liquidity pools?
To find the Liquidy pools you navigate to the top panel on Binance on your desktop browser and click on Finance -> then proceed to click on “Liquidity swap”.
When adding to the liquidity pool you can choose to add both of the tokens in the pair or just one of the tokens in the pair, however there is a fee involved in adding only one of the tokens. For this guide I will use the pair DOT/USDT as an example.
As seen in the image above, adding both of the tokens results in “0 fee”, while there are some fees involved in adding only Dot or Usdt. This specific pair is at the time of writing reported to yield 27.53% APY, whereas 7.45% is BNB rewards and 20.08% is rewarded from the trades performed on the actual pair. To add to this pair both of the tokens, you need to first ensure that you have both DOT and USDT in your wallet. When adding you will be able to input the amount you wish to add, but keep in mind that the value of both will be equal. This means that if you wish to add 1 DOT then you will also have to add the corresponding value in USDT.
To add, simply agree to the Terms and click on “Add”.
After adding to the pool, you can monitor your funds in your wallet under “earn”, but keep in mind that even though you get paid rewards daily, the value you see will be that of the funds you added. In effect this means if DOT suffers a price decrease your investment will show a negative number. This is nothing different from staking or any of the other earns, it is just different in the way it is presented as it shows the value of the tokens you have added.
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