- Binance.US has announced a 6% APY Ethereum staking programme
- The introductory rate is the largest yet offered by exchanges and other platforms
- The programme will allow users to stake as little as 0.001 ETH
Binance.US has launched a 6% Ethereum staking programme just ahead of its shift to a proof-of-stake consensus mechanism. This deal, which is an initial rate that is not guaranteed, is nevertheless a big step up from the likes of Lido and Coinbase, whose APYs are in the 3-3.25% range, and even tops Nexo’s 5% initial rate. The offer will be attractive to those who don’t have the funds or the technical nous to run an Ethereum node for themselves, but there are a couple of things that would-be users need to be aware of before they take the plunge.
Ethereum Nodes Now Unaffordable for Most
When Ethereum announced the basics of its staking mechanism in mid-2020, the news that interested parties would have to lock up 32 ETH was not a huge deal with Ethereum around $200 at the time. Now however, with the price around the $1,600 mark, the ability for the average crypto user to be able to run a full Ethereum staking node is massively reduced.
This has led to exchanges such as Binance, Coinbase and others offering a staking programme that allows users to stake as little as 0.001 ETH and still claim a reward. Binance’s deal is the most generous, or so it seems.
Watch Out for the Pitfalls
While the offer is the best around, it is an introductory rate designed to hook in as many users as possible, with the rate inevitably dropping as time passes. There is also the consideration that Binance.US, like Coinbase, will not distribute staked ETH rewards until Ethereum’s transition is entirely over the line, which could be as late as January.
There is also, of course, no guarantee of success, with a 6% APY paling into comparison to all your ETH being lost – Binance.US says you cannot unstake your ETH once you have staked it, leaving your investment entirely in their hands and the hands of the Ethereum developers.
You pays your money, you takes your choice.