Binance, the number one exchange by trading volumes, has made a foray into the lending business. Binance Lending will allow its customers to earn interest on Binance Coin (BNB), Ethereum Classic (ETC) and Tether (USDT) with more coins potentially being added in the future.
Three lending products
Binance CEO Changpend Zhao teased the announcement earlier today by implying that the exchange’s users would be able to earn crypto while they sleep. However, CZ spoiled the surprise by previously mentioning that the exchange was considering the launch of a new lending platform by the end of the summer.
BNB, the native cryptocurrency of Binance, has the highest annualized interest rate of 15 percent. Meanwhile, USDT and ETC lenders will be content with 10 percent and seven percent respectively. However, Tether holders will be able to lend out a maximum amount of one million Tether.
Binance Lending will also allow the exchange to increase its existing margin limits.
Here’s how it works
The modus operandi of the new feature seems very straightforward — users are required to subscribe funds and hold them in a designated Binance lending product while accruing interest. The maturity term of the initial lending products is set at 14 days.
The principal amount (along with the earned interest) will be displayed in the ‘Balances’ section as soon as the product reaches its redemption date.
The interest rate for each product is guaranteed, so your crypto balance will always grow, regardless of how the market moves,” said CZ in his statement.