Binance has rolled out the next phase of its growth plan by announcing a lending service with interest rates up to 15%. Binance Lending opens for subscriptions today and will work on a first-come first served basis. BNB, USDT and, perhaps surprisingly, ETC will be the coins users can deposit, with interest rates differing per token and each user account having a lending ceiling. The loans will be used by Binance as part of their recently extended margin trading platform to extend credit to margin traders.
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Lend $BNB at a 15% APR!?
(BNB loaned out still count towards; launchpad, VIP tier, Referral tier, etc)https://t.co/4z8Ai5wLx4 pic.twitter.com/iTWjhOHGCg
— Binance (@binance) August 26, 2019
Careful What You Deposit
While lending platforms, both legitimate and illegitimate, are nothing new, Binance is probably the safest option to date, given the somewhat dubious nature of other platforms such as BitConnect that gave the concept a bad name. The process for registered users simply involves selecting your token of choice and the amount you wish to lend, at which point the funds are locked for the two-week period. At the end of the two weeks the tokens are unlocked and your interest is paid to you. Given the different rates for different tokens, depositors can expect to earn the following:
Of course when it comes to BNB and ETC, lenders will have to factor in the volatile nature of their tokens, which could see the dollar value of their holdings decrease while their token holdings increase. USDT token holders on the other hand should be fairly confident that the value of their token will be the same coming out of the window as going into it.
Binance Lending vs Bank Savings
While Binance Lending’s periods are short, those that are happy to deposit a large amount on a regular basis will see a very healthy return over the year, compared to a savings account with a regular bank. For example, someone with $50,000 in USDT would see a $5,000 return if they were able to deposit it every two weeks for the whole year. By comparison, the average savings account interest rate in the US is 0.09%, meaning your $50,000 would earn you a measly $45 over the year. This means that just by making use of the Binance lending platform for one two-week period you would earn almost four times as much as you would over the whole year in a regular savings account. Now that’s something to think about.
