BNSOL is a liquid staking token on Binance that represents Solana (SOL) staked while maintaining liquidity, allowing users to trade and use their staked tokens without having to wait for staking periods. Binance’s BNSOL staking feature is designed to unlock the value of SOL while earning staking rewards. Here is a detailed breakdown of BNSOL and how to stake it:
Understanding BNSOL: What It Is and What It Does
BNSOL is a Liquid Staking Token (LST) introduced by Binance, providing users with a flexible and liquid alternative to traditional Solana staking. Typically, when users stake #solana directly on the Solana network, their tokens become locked for a set period of time, restricting liquidity and access to other financial activities during the staking period.
With BNSOL, users hold all of their staked SOL liquidity. The liquid staking mechanism works by giving users BNSOL tokens in exchange for staked SOL. This version of staked SOL allows users to:
Trade BNSOL on Binance: Users can freely buy and sell BNSOL on the Binance platform.
Participate in decentralized finance (DeFi) applications: such as liquid mining or lending.
Earn Staking Rewards: As BNSOL rises in value over time relative to SOL.
How to make #BNSOL
Each BNSOL token represents one SOL plus the rewards earned from staking. The value of BNSOL increases over time as staking rewards accumulate. This increase is reflected in the BNSOL conversion ratio, which is updated approximately every two days (equivalent to an epoch on the Solana network). As staking rewards are constantly accumulating, the ratio ensures that the value of BNSOL grows relative to SOL.
Storage and retrieval process
Storage process:
$SOL Staking: Users start by depositing SOL into their Binance account. In return, they receive BNSOL tokens into their Binance wallet.
Conversion Ratio: The number of BNSOL tokens received depends on the current BNSOL conversion ratio, which is updated regularly to reflect the rewards accumulated from staking.
BNSOL vs SOL redemption:
When users decide to redeem BNSOL for SOL, they do so at the current conversion rate. However, there is a waiting period for the redemption, usually around four days, due to the time it takes to process the original Solana staking. Alternatively, users can trade BNSOL immediately for SOL on the exchange, which bypasses the waiting period but may be at a different rate.
Advantages of using BNSOL
Open liquidity:
Unlike traditional SOL staking, where tokens are locked, SOL staking on Binance provides BNSOL tokens that hold liquidity. This liquidity can be used for trading or other financial activities such as lending or providing liquidity to pools, without sacrificing staking rewards.Staking Rewards:
The main advantage of liquid staking with BNSOL is that users continue to earn staking rewards, as reflected in the increase in BNSOL value compared to SOL. This mechanism ensures that users do not lose rewards while maintaining flexibility in the asset.Refund flexibility:
Users can choose when and how to redeem BNSOL:Via Transfer: Redeem directly through Binance staking system and wait for standard withdrawal process.
Spot Market Trading: Sell BNSOL immediately for SOL, providing immediate liquidity but potential exchange rate volatility.
Various uses:
Binance is expanding the uses of BNSOL across multiple platforms and protocols. These include trading on the Binance Marketplace, staking on external DeFi platforms, lending, and more. As DeFi evolves, BNSOL will likely integrate with different DeFi protocols, allowing users to increase capital efficiency.Guarantee as a loan:
BNSOL can be used as collateral in lending markets. Users can stake SOL, receive BNSOL, and then borrow assets using BNSOL as collateral. This dual benefit allows them to access liquidity while still earning staking rewards for SOL.Accessibility and user friendliness:
Binance makes staking simple, allowing users to store SOL with just one click. This simplicity and accessibility makes it an ideal solution for crypto beginners and advanced users alike.
Security and reliability in BNSOL storage
Binance’s Solana staking solution is built on a robust framework provided by Solana Labs’ Stake Pool software. This software has been thoroughly audited by third-party security firms, ensuring the security and reliability of the staking process. Binance’s reputation as a trusted global platform adds an extra layer of trust for users looking to store SOL through their service.
BNSOL vs. other storage methods
To understand whether BNSOL is the best choice, it is helpful to compare it to other storage alternatives:
Original SOL sticking:
Liquidity: Native SOL storage locks tokens for a set period, limiting flexibility.
Rewards: Users earn staking rewards, but no liquidity to access them until the unstaking process is complete.
Waiting Period: SOL storage on the Solana network includes a multi-day unstaking period when redeeming tokens.
SOL Staking Products Locked on Binance:
Liquidity: These products require users to lock their tokens for fixed periods (30, 60, 90 days).
Rewards: Offers a fixed annual interest rate, but early redemption forfeits the rewards earned.
BNSOL (Binance Staking SOL):
Liquidity: BNSOL offers an alternative to liquid staking, allowing users to maintain liquidity and use tokens while earning staking rewards.
Refund: Provides flexible refunds, either through Binance staking mechanism or BNSOL trading on the exchange.
Annual Percentage Rate (APR): The APR for rewards is dynamic and adjusts based on the conversion ratio between BNSOL and SOL.
How to store SOL and get BNSOL
To participate in SOL staking on Binance and get BNSOL, follow these steps:
SOL Deposit: Transfer SOL tokens to your Binance account.
SOL Storage: Go to the SOL Storage section and store your SOL. You will receive BNSOL tokens in your Binance wallet.
Earn Rewards: Keep BNSOL and continue earning staking rewards over time.
Redeem BNSOL: When you want to unstake, either redeem BNSOL for SOL or trade it on the exchange for instant liquidity.
