Is there a possibility to mine BNB?
Traditional mining using computing power (graphics cards, ASIC miners) is only possible on blockchains that operate on the PoW (Proof-of-Work) consensus mechanism. This method is used to mine Bitcoin, Dogecoin, Litecoin, and many other digital coins. However, there are blockchains that operate on the PoS (Proof-of-Stake) algorithm, where mining is not provided for. Such a mechanism underlies the blockchain network from the Binance exchange, and therefore its internal token BNB cannot be mined.
Despite the fact that this coin cannot be mined, there is an alternative — staking. Staking is the process of holding tokens by the owner in the blockchain network for a certain period of time to support its operation and security, for which they receive a reward in the form of additional coins to the 'frozen' amount. This is a passive way to earn on already existing digital assets. It does not require large investments in expensive equipment; it is enough to have BNB in your cryptocurrency portfolio.
The opportunity to stake BNB exists both on the Binance exchange itself, allowing users to keep their assets within its platform, and on specialized platforms and in crypto wallets.
How staking works on Binance
You can stake BNB in two ways — independently or delegated. The first is more complicated, as you need to have a large amount of coins in your balance and special software to lock them. You will also have to maintain a constant connection to the network, which is energy-consuming. The second is easier: you just need to transfer your tokens to a trusted person who will handle all the processes independently. In the case of Binance, this person is the exchange itself. Here, you can draw an analogy with a traditional bank deposit.
When a owner 'freezes' their BNB, they are essentially transferring them to the cryptocurrency exchange. Binance can use these assets for its own staking to maintain the blockchain or provide them as loans to other users, paying out interest to the delegators from these earnings.
Types of staking available on Binance
Similar to deposits, staking generates passive income, the amount of which depends on the locked amount. Users have several options for how to stake their BNB.
1. Fixed Staking
In this case, the asset holder chooses the duration for which they want to 'freeze' the coins. This condition cannot be changed later without losing the newly received tokens. For example, if you stake BNB for 180 days but withdraw it earlier, all accrued reward interest will be forfeited. Only after the contract is completed will the profit be credited to the balance.
Such a staking format allows for a fixed and predictable income. It is chosen by users interested in receiving a larger reward amount, as the interest rates on such contracts are usually higher.
2. Perpetual Staking
This model allows the user to pause the locking of assets at any moment, even if the specified period has not yet expired. Interest will be accrued until the owner withdraws their BNB from the blockchain or sells them. The first payments typically arrive within a day after entering into the perpetual contract.
This method of token mining is suitable for those who want to manage their investments and have a certain degree of freedom in their actions. Profits can be withdrawn at any moment and reused in other contracts that may have more favorable terms.
3. DeFi-staking
DeFi projects operate on smart contracts. They are well-suited for such tasks, as they can conduct transactions automatically when their conditions match predefined parameters.
What's different from regular DeFi staking is that it involves third parties, which can be independent users as well as crypto projects. In fact, this is a classic loan, only within the framework of digital assets.
DeFi staking has several important features:
- High yield. The entry threshold is lower (you can start staking with a small amount), and the profit is higher than with regular PoS staking. However, everything depends on the specific terms of the deal and the lock-up period of the coins;
- Quick earning of rewards. Earnings from investments start coming in within 24 hours, but the income received can usually only be withdrawn after a month;
Payment guarantee. In the case of BNB staking on Binance, users are protected from fraud not only by the terms of smart contracts but also by the authority of the exchange itself.
Staking BNB is of interest to anyone looking to grow their cryptocurrency assets with minimal effort. Since the token is quite expensive, it is used not only within the exchange due to its versatility but also demonstrates stable growth, making it a viable option for staking. Coins can be staked not only on the cryptocurrency exchange but also in cryptocurrency wallets where users store them. For example, popular cold hardware wallets like Ledger and Trezor, as well as hot wallets like Trust Wallet, Atomic Wallet, and others offer this capability.