Binance has officially unveiled Binance SOL Staking offering a flexible way to stake $SOL tokens while maintaining liquidity and accessing a variety of utility options within the Binance ecosystem. I know many people have never taken a leap into DeFi and actually staked anything so in this article, I will explain Binance SOL Staking and the benefits it offers.
I believe this is a great way to HODL #Solana until we see it hit a bull market peak of around $800 in this run. I dont expect it to be fast, I expect Eth to start performing first then Solana but in terms of ROI, I think Solana is more juicy so why not HODL via #BNSOL .
What Is Binance SOL Staking and BNSOL?
Binance SOL Staking allows users to stake their SOL tokens and receive BNSOL, a liquid staking token (LST) that represents the staked SOL. Normally when you stake anything, it basically results in you earning yield while your assets are locked up for the duration of the staking. Liquid Staked Tokens changed that meaning when you stake your token, you get another token that is pegged to the value of the staked asset i.e. Stake Sol, get BNSOL and Yield. Its the same concept that we saw with StEth by $LDO so you’re not just locking up your SOL; you’re converting it into a token that accumulates rewards over time, all while being usable within Binance’s ecosystem or even external decentralized finance (DeFi) protocols.
How Binance SOL Staking Works: Staking, Rewards, and Redemption
To understand how Binance SOL Staking works, it’s important to look at four key elements: staking, rewards, redemption, and withdrawing.
Staking SOL
When you stake your SOL on Binance, you’ll receive BNSOL tokens in your Binance Spot Wallet. The amount of BNSOL you receive is based on the BNSOL:SOL conversion ratio, which is updated at each Solana network epoch (roughly every two days). Over time, as staking rewards accrue, the value of BNSOL increases relative to SOL.
BNSOL Value & Rewards
One of the standout features of BNSOL is that it accumulates staking rewards. Starting from August 26, 2024, the value of 1 BNSOL represents 1 staked SOL plus any staking rewards accumulated since that date. As the rewards accumulate, the value of BNSOL progressively increases compared to SOL. So, even when you’re using BNSOL for other purposes like trading or lending, the rewards continue to build up.
Redemption
When you’re ready to redeem, you can convert your BNSOL back into SOL at the current conversion rate. It’s important to note that there’s typically a four-day waiting period for processing redemptions. However, if you need immediate liquidity, you can sell BNSOL directly on the spot market which is my favourite part of LSTs.
Withdrawing BNSOL to External Platforms
Your BNSOL tokens aren’t confined to Binance. You can withdraw them to any compatible wallet, such as the Binance wallet or Phantom, and continue earning rewards while using BNSOL across various DeFi applications.
Getting Started
Participating in Binance SOL Staking is easy:
1. Stake SOL: Purchase SOL and stake it on Binance to receive BNSOL.
2. Earn Rewards: Hold your BNSOL and watch as its value increases with staking rewards.
3. Redeem: Convert BNSOL back to SOL at any time, either through the standard redemption process or by selling it on the spot market.