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How To Get The Best Crypto APY In 2021 | Binance EARN + STAKING
What is Binance Earn?
Earn interest on your crypto at Binance with Binance Earn. Earn yields on Binance through staking, savings programs, and liquidity swaps.
This article will talk about each method of earning interest on Binance to help you understand your best option for crypto yields.
First, if you don’t already have a Binance account, Use Binance referral code “GRYRDBZW” to save 20% on trading fees for life. Then, check out our Binance referral code review for more details on how to save on trading fees. Once you have your account set up, keep reading to learn how to generate a passive income on Binance.
Binance doesn’t have an earn while you learn program, but the Binance owned platform CoinMarketCap does. With CoinMarketCap Earn you can get free crypto just by learning about different cryptocurrencies.
Binance Interest Risks
It is important to know there are risks involved with yield generating products. Risks include the volatility of the underlying assets you own, exchange and account hacks, on-chain contract security issues, and impermeant loss.
Also, while Binance does have an insurance fund, your funds are not FDIC insured, and your funds are not guaranteed against some types of loss (for example, loss with DeFi staking due to on-chain issues).
Given the above, it is theoretically possible to lose money while earning interest, so keep that in mind.
With the basics and the risks covered, let’s dive into the different ways to earn interest and the pros and cons of each. To do this, we will separate yield products into two groups, Single-asset products like Staking, Vaults, and Savings, and Dual-asset products like Liquidity mining.
Single-asset Yields: Binance Staking & Savings Accounts
Staking options like locked staking, ETH 2.0 Staking, and LaunchPool, and savings accounts like Flexible Savings and Locked Savings are all similar methods of earning a yield from a single asset on Binance.
Although some of these methods don’t have a lockup period, most involve locking up a single coin for a period of time and earning interest over that period. In most cases, you earn the token you are locking up, and in most cases, options with a lockup period offer higher yields.
Regarding yields, the APY on single assets doesn’t tend to be as high as with liquidity mining and other dual-asset methods described in the next section. However, the APY tends to be more consistent, and there is no risk of impermanent loss.
Here is how each of Binance’s yield-bearing single-asset products works:
Locked Staking: Many coins have staking programs. Binance lets you stake your coins via their platform. These all require lockups, have lockup periods of 15 – 90 days, and produce competitive yields.
DeFi Staking: These are coins Binance will stake for you on-chain. You take on the contract risk (risk of contracts getting hacked, for example), but you, in return, get competitive yields and flexible locking rules (so you can unlock your funds at any time).
LaunchPool: This is a way to “farm” new assets that are launching on Binance. Farming is when you get a new coin as a yield, typically for staking that coin or, in the case of Binance, for staking a Binance-related asset like BNB or BUSD. New coins sometimes offer high APYs to incentivize participation and adoption.
Flexible Savings: Savings accounts that have no lockup periods. They typically have lower yields than fixed savings products. You can click the “subscribe” button to gain the yield and then remove your funds at any time.
Fixed Savings (Locked Savings): Saving accounts where your subscribed assets can only be redeemed after a fixed period of time (typically 15 – 60 days). They tend to offer a higher yield than flexible savings. There are some high yield limited supply/high demand options here under “activities” as well.
BNB Vault: There is more than one way to earn a yield on BNB, and Binance’s BNB vault lets you take advantage of all of them automatically. The vault shifts your BNB between Flexible Savings, BNB DeFi Staking, and Launchpool to give you the best APY returns on your BNB at a given time.
Dual-Asset Yields: Liquidity Mining and Dual Investment
These investment types generally offer some of the best yields on Binance, but both carry extra risks.
Here is how each of Binance’s yield-bearing dual-asset products works:
Liquid Swaps: Here, you are basically acting as a market maker and liquidity provider. You put both sides of a trading pair up, and you get BNB rewarded as a yield. You provide liquidity to a market in return for a part of the trading fees. The drawback is that you can experience impermanent loss, which is where one asset goes down relative to another resulting in a loss compared to holding each asset separately. The yield helps offset impermanent loss, ideally resulting in an overall profit. Liquidity pools don’t require a lockup.
Dual Investment: This is a mix between yield farming and options. You deposit one asset of a pair, for example, Bitcoin with the BTC-BUSD [up-and-exercised] product. Then you choose a strike price. If the price of the asset is above the strike price, you get BUSD worth the amount of BTC you deposited at the strike price plus the yield. If the price is not above the strike, you keep your BTC plus the interest. They also have down-and-exercised products which let you deposit BUSD or USDT and pick lower prices. This is product can be a bit complicated, but it is useful in the right situation. For example, if you are holding your Bitcoin to a certain price point and then plan to sell, you can choose to earn interest and only sell if that price is reached. One last note, you cannot unsubscribe before the fixed delivery date. So once you enter this contract, you are locked in!
The Best Way to Earn Interest on Binance
Now that we have covered all the methods for earning interest on Binance, you are probably wondering which method is the best.
The best way to earn interest on Binance depends on which coins you hold, how long you plan to hold them, and your risk appetite.
If you are looking for the best APYs on Binance, then you’ll need to take on some extra risk. Generally, this is the risk of the coin(s) you hold going in an unfavorable direction. At the end of the day, this may result in you making less profit than intended. For example, one of the best APY choices right now is 33.52% for FARM, which is currently in a downtrend. Another example is 72% for AVA/USDT, where any deviation of AVA from USDT will cause impermanent loss. Plus, these high APY choices can see APYs fluctuate quickly. So there is a lot to keep in mind.
Meanwhile, if you are looking for consistency, mainstays like ETH, BNB, and stables tend to have some consistent earning opportunities. Their price action is also easier to predict than dual-asset products and volatile altcoins. When looking at these options, make sure to check out BNB vault, DeFi staking, and ETH 2.0 staking. DeFi staking may have contract risk, but the high APYs are an attractive trade-off.
In our opinion, the best way to earn interest for most people is to take coins you are holding anyway and make them work for you. If you already want to own FARM, then the APY is far more attractive for you than for someone who would buy it just for the APY.
With that said, if you have any questions about which yield options you should pick, feel free to drop us a comment below. Happy staking!