Staking in the blockchain and cryptocurrency space is one of the favorite passive means of income generation with active participation in network security. Traditional staking generally involves the locking up of assets for some fixed period, hence limiting trade and other uses of such assets. Liquid staking is a relatively new topic that overcomes such limitations by adding the features of flexibility and liquidity on top of staking rewards.
One of these liquid staking solutions is BNSOLâa token by Binance representing staked Solana, or SOL. This post will explain what BNSOL is, how liquid staking happens, what benefit there is to it all, and then how to stake Solana (SOL), on Binance and get BNSOL in a step-by-step manner.
What is BNSOL?
Binance issues the liquid staking derivative token BNSOL when users stake their Solana (SOL) on the platform. When users stake the SOL, they get tokens called BNSOL in return, tokens representing how much value staked SOL and rewards accumulated over time are concerned. This allows users to remain liquid because, later on, users will be able to trade, transfer, or use BNSOL in DeFi applications while their originally staked SOL earns rewards.
BNSOL works similarly to other liquid staking tokens like stETH, which is used for Ethereum. The major advantage of using BNSOL is that the user can remain active in the market and maintain flexibility with his assets, while getting his rewards for staking. Its value fluctuates with respect to the current market price of SOL and the reward that is produced by staking.
How Does BNSOL Work?
By staking the SOL through Binance, it means Binance stakes your tokens for you in the Solana network. Binance simply manages the staking process entirely for you and, in return, gives you the BNSOL tokens that represent your staked SOLs. First of all, while your SOL is being locked up in staking, through these BNSOL tokens, you get to retain the liquidity of them.
Each BNSOL token is representative of the staked SOL and the rewards that, in turn, are constantly accruing. The value of BNSOL increases over time directly proportional to accumulated rewards; this essentially means that, through holding BNSOL, one derives value indirectly from liquidity and staking rewards.
For example, if you stake 100 SOL, then you get the equivalent amount in BNSOL. At that point, if the staked SOL generates rewards, then BNSOL goes up proportionally in value.
Why Stake with BNSOL?
Following are a few benefits of staking Solana with BNSOL:
Liquidity: Probably the major limitation with classic staking rests in the fact that for the whole period of the staking process, assets cannot be liquid. In BNSOL, there is the retention of liquidity, which would mean you can trade your staked assets or simply sell them or make use of them while earning rewards.
Staking Rewards: While your BNSOL is being staked, the original staked SOL goes on earning rewards. In this way, BNSOL appreciates with time as more and more staking rewards get accrued to it, developing into a dynamic representation of both what you have staked in SOL and its accrued earnings.
Integration with DeFi: BNSOL can be utilized on several DeFi platforms to extend opportunity-to-lend, provide liquidity, or contribute via yield farming. Open a whole new avenue to stake rewards on staked assets while enjoying the benefits of staking rewards.
Flexibility: Most of the traditional staking has a locked Total Value for a set period, where within this time, the asset cannot be moved or traded. Still, with BNSOL, users can redeem or trade their assets at any time without paying the waiting time of the unstaking period, hence giving that crucial flexibility in the fast-paced cryptocurrency markets.
How to Stake Solana (SOL) on Binance and Get BNSOL
Staking Solana to get BNSOL on Binance is pretty straightforward. Here is the process in detail:
Step 1: Deposit wallet with Solana (SOL) via Binance
You need to fund your wallet with Solana. You can do this by purchasing SOL directly on Binance Spot Market or Deposit it from an external wallet to your Binance Account.
To Deposit, Go to your Binance Wallet.
Press 'Deposit', then search for Solana from the drop-down menu.
Follow the on-screen instructions to buy SOL or transfer it from another wallet.
Step 2: Go to Binance Earn Hub
Click on Binance Earn. Here, Binance hosts staking services.
Tap the main menu and select 'Earn.' Click there and go directly to 'SOL Staking', Now on the staking page click 'Stake SOL'.
Review Terms & Confirm Staking - Before confirming the stake, Binance will summarize the staking termsâwhat was expected as APR and other conditions. Review them before confirming your stake.
Note: Minium staking amount is 0.01 SOL
Step 3: Receive BNSOL & Monitoring your Rewards
Once Binance confirms your stake, Binance will credit the BNSOL balance to your account automatically. The amount of BNSOL tokens that you'll receive depends on the amount of staked SOL.
You can view your staking rewards through the Binance Earn dashboard. Over time, as the Solana network continues to reward staking, your BNSOL will build value.
Liquidity Solution with BNSOL
BNSOL is a convenient way without hassle for almost any Solana holder to receive the staking rewards with high liquidity. By staking your SOL on Binance and getting BNSOL, you are able to enjoy staking without the hassle of your asset being locked up. Based on this, BNSOL opens further avenues through DeFi where users can maximize the potential return.
