Binance is one of the most convenient and liquid platforms for active cryptocurrency trading, but its functionality is much wider. Investors who want to earn from their not used cryptocurrency with minimal risk will find a great deal of helpful information here. In this article, let’s take a look at the passive income opportunities on Binance – this includes many directions that vary in the degree of risk-taking. Binance emphasises ease of management – even a novice can cope with its functionality.
- Binance Earn
- Other options
Binance Earn page: https://www.binance.com/en/earn
This is a section that includes a range of investment tools to suit all tastes – from almost risk-free, but lower profit, to high risk, but which can generate substantial gains.
Floating term and rate deposits are an opportunity to invest cryptocurrency at interest and withdraw it at any time, earning income only for the period the funds have been in the pool.
The annual return depends on the number of assets invested, for example, for BUSD the structure is as follows
- 0-500 BUSD: 7.00%
- 500-20 000 BUSD: 1.00%
- >20 000 BUSD: 0.4%
Flexible deposits for 140+ coins and stablecoins are available at the moment. It is possible to automatically transfer funds from balance to flexible deposits every day. This way they will always be in circulation and bring profit.
Such deposits are distinguished by the fact that they have a strict term for freezing the assets. During this period, they cannot be withdrawn, and at the end, they are automatically withdrawn and credited to the owner along with the profit.
Typically, the following freeze periods are available:
- 7 days
- 14 days
- 15 days
- 30 days
- 60 days
- 90 days
These deposits earn higher interest than flexible ones. The longer you select the term, the lower the interest. The list of coins available for investment changes from time to time.
The Launchpool page: https://launchpad.binance.com/
Launchpool is a tool for developers who want to expand their token reach and for investors who want to earn extra and get bonus promising tokens.
The idea is that the platform awards tokens to new projects by stackers who invest their assets in specific pools – such as BNB or BUSD. The investor continues to receive the stated income from the deposit, but is additionally credited with bonus tokens. Since Binance usually promotes worthwhile projects, there is a high chance that these assets will grow in value and generate income.
Examples of tokens that have been successfully distributed in this way:
- Highstreet (HIGH)
- BENQI Finance (QI)
- Manchester City Fan Token (CITY)
- Mines of Dalarnia (DAR)
- Mobox (MBOX), etc.
The token distribution event usually lasts for 30 days. During this period, the exchange evaluates how many assets you have in the right pools and awards bonus tokens on a daily basis. New assets can be traded once they have been added to the listing, usually one week after the start of the event. Read more about earning on Launchpool here.
Flexible and fixed staking products with increased income. Binance leverages invested assets in decentralised protocols and liquidity pools, so there are risks associated with third-party pools.
For example, Binance is not liable if the protocol is attacked by hackers during staking and funds are lost.
At the same time, the popularity of the tool is due to its convenience: it is much easier than picking projects, connecting to them, managing private keys, etc.
BNB Vault page: https://www.binance.com/en/bnbmining
BNB Vault is a handy tool of passive income on the exchange, that allows you to get income from BNB tokens in different ways at once:
- DeFi staking
- Flexible deposits
While BNB is in staking, it continues to bring benefits such as VIP status and lower commissions. You can set up automatic transfers of BNB to the pool every day from your spot wallet.
Liquid Swap page: https://www.binance.com/en/swap/pool
The exchange has a service for instant exchange on the principle of AMM (Automatic Market Maker). Users themselves provide liquidity to the pool for exchange and get reward for it – a percentage of each transaction carried out within the pool.
It is possible to farm liquidity in two main directions: stablecoins and innovations, i.e. tokens of new projects. Profits fluctuate constantly depending on the state of the market. In the table on the product page you can see how much liquidity you already have in each pool and what the trading turnovers in it are per day.
Dual Currency Investments
Dual Currency Investments are high risk instruments with no guarantee of profitability. Such investments are settled in one of two coins. Two types of dual currency investments:
- Execution on rise (product is executed if the settlement price is higher than the strike price)
- Downwards execution (executed when the estimated price is lower than the strike price)
If the product is not executed, the investor receives a return in the currency of the investment; if it is executed, the investor receives a return in the alternative selected coin.
DOT slot auction
Those wishing to participate in Polkadot’s slot auction vote for projects and then, based on the votes, the product gets to occupy a slot and connect its parachain to the network.
Once the auction is completed, the exchange distributes awards to participants according to their votes as well as a predetermined schedule.
At the end of the auction, investors can convert their DOTs into tokenised BDOT assets at a 1:1 ratio.
ETH 2.0 Staking
Ethereum 2.0 (or, more accurately, the Ethereum consensus layer as it is now called), will be launched in September 2022. Those wishing to make money from staking can invest assets now, but the snag is that doing so directly requires investing an amount of 32 ETH. That’s quite a lot when you consider that the exchange rate of Ethereum is now $1,658.
A shared staking pool where the users can invest any amount of assets they want, starting with the smallest amounts. Conversion of the rewards earned will be possible after the merger of the network.
The following methods are not part of the Earn section, but also allow you to earn money passively on the exchange in one way or another.
Grid Trading is an automated grid trading tool.
A user has to set the range (upper and lower limit of rate), in which positions will be opened and frequency of orders. The system will do the rest on its own, creating the orders according to the set parameters.
Grid trading is available for both the spot market and futures. Leverage level can be set up.
TWAP is a strategy available on the Binance futures market. It is algorithmic trading based on the weighted average price over a period specified by the user. It allows minimizing the impact of a large order on the market by splitting it into smaller positions, executed at regular intervals.
In what cases TWAP works best:
- The rate is not expected to have a pronounced trend during times of increased volatility.
- An order must be executed for which there is insufficient liquidity in the exchange.
The trader is required to specify the trading pair, enter the size of the order and select the period during which the order is to be executed. Also, ensure that the TWAP meets the margin requirements.
One of the popular strategies for long-term investors is to buy cryptocurrencies into an investment portfolio little by little. You can automate this process.
You need to choose a period:
- 3 years
- 1 year
- 6 months
- 3 months
Click “Create Plan” and specify how often and how much to convert to the selected cryptocurrency. Please note that the returns shown in the table are not predictions: they are reference information about the price dynamics over a given period, so that you can estimate the currency’s potential. But there is no guarantee of further growth.
Launchpad page: https://launchpad.binance.com/
Launchpad is a platform for starting new projects with an IEO (Initial Exchange Offer). The users must hold BNB coins in their account during the balance recording period and then subscribe for new tokens.
At the end of the distribution, the token sale participant can purchase the amount of tokens that is possible based on the average daily balance of BNB. But no more than a certain maximum – this is done in order to ensure fair distribution, so that a large investor cannot single-handedly buy out most of the tokens.
How can I get passive income?
By using different types of deposits and staking as well as high-risk dual currency investments, automated trading strategies, and token sales.
Do all methods offer guaranteed returns?
No. The least risky are flexible and fixed deposits, BNB Vault, Ethereum staking. There are some very risky ones – DeFi staking, Dual Currency Investments.
What automated trading strategies?
TWAP, grid trading for spot and futures.
What is BNB Vault?
An aggregator of BNB staking returns from destinations such as Launchpool, DeFi staking, flexible rate deposits.
What is auto-invest?
Automatic purchase of cryptocurrency on a pre-determined schedule. Purchased assets are sent to flexible deposits to start generating income immediately.
What is the difference between flexible and fixed deposits?
Flexible deposits have no investment term, and can be withdrawn at any time. The latter, on the contrary, are more profitable, but the deposit is blocked for a fixed term (from 1 week to 3 months).
The Binance exchange is a multifunctional platform that is suitable for active traders as well as for investors with a more relaxed earning style. At the same time, passive income can be earned through many different methods with varying degrees of risk and level of profit. That’s why Binance attracts millions of users every day – with the right approach, you can combine different options to manage your cryptocurrency and achieve a good income. Of course, you can’t forget about the risks that are everywhere, especially since it is a centralized exchange.