In recent years, there have been dozens of alternatives that have emerged for the use of our cryptocurrencies, this especially thanks to the emergence and development of decentralized finance. And no company has been more at the forefront of these developments than the Binance exchange. What is confirmed now that it has been announced that we can now staking ADA and ATOM on Binance.
Staking: an alternative
For a long time, the only ways to make a profit in the crypto world seemed to be trading and hodling. Well, beyond buying cryptocurrencies and storing them waiting for them to rise in value. Or use them to make purchases and sales between crypto assets, taking advantage of price differentials. There really seemed little else that could be done to invest our virtual currencies.
This has changed recently, although options such as staking are quite old. It was with the great fever of decentralized finance (DeFi) of the year 2020, that this activity began to become popular as a mechanism to generate income in the crypto world.
Staking is a mining method based on Proof of Stake (PoS), an alternative system to the common Proof of Work (PoW) used by Bitcoin. Under the PoS, those who confirm transactions on the Blockchain and therefore receive income are not defined according to their computing power. If not according to the amount of the cryptocurrency that they have stored in a specific wallet. The greater the number of tokens of the cryptoactive, the greater the possibility of generating profits.
Therefore, companies like Binance offer staking services. Through them, users can leave a small amount of money staking in Binance, which will be used by the exchange to mine cryptocurrencies under the Proof of Stake method. Subsequently delivering part of the profits to the users who participated in the staking.
Binance’s new service
Thanks to this corporate staking system, users avoid the need to deal with technical problems to carry out staking. Generating more profits than if they carried out this process by themselves. While the company behind the service, in this case Binance, also receives income by serving as coordinator of the activity. For this reason, it is important for Binance to start offering a staking service with ADA and ATOM.
The creation of the staking service with these two cryptocurrencies was announced by Binance yesterday through a tweet. Establishing a staking limit of up to 1,000 ADA tokens and 50 ATOM tokens for each user.
The amount that each user wants to use in the staking process will be deducted from their spot wallet on Binance. Keeping these funds blocked for at least 15 days, during which the user will not be able to use them. If the user wishes to withdraw his ADA or ATOM earlier, he may do so, taking the process between 24 and 72 hours, and the interest being deducted from his main balance.
Finally, regarding the interest for the staking of ADA and ATOM, Binance estimates that it will be approximately 21.79% for ADA and 24.79% for ATOM. Depositing it daily in the Binance user’s spot wallet.