Binance plans to launch the liquid staking token BNSOL later in September, redefining staking on centralized exchanges.
Leading cryptocurrency exchange Binance has announced it will launch its Solana-based staking token (BNSOL) by the end of September. The wrapped token will be issued to users who intend to engage their Binance-staked Solana in other on-chain activities.
Upon staking the Solana, users can mint BNSOL from Binance while still earning the percentage remuneration for the value of their staked SOL token. These liquid staking tokens could be used in the same vein as the staked SOL and can be sold, lent, or traded on Binance and any other decentralized platform that adds support for BNSOL.
Binance is one of the first exchanges to issue a liquid-staking version of Solana. The product mimicked the Ethereum version that the leading staking platform, Lido Finance, issues to users who stake ETH with them.
Binance to Enhance Staking
The venture is part of Binance’s quest to enhance SOL staking on its platform. The leading exchange aims to provide options and flexibility to investors who wish to stake Solana on its platform.
Vishal Sacheendran, Binance’s head of regional markets, noted that the new staking mechanism outweighs the traditional system. He said that, unlike the native staking method, users could still earn rewards while possessing liquidity to carry out on-chain activities on the platform and other protocols where they are accepted.
Binance will calculate the earnings on the SOL stake with a dynamic annual percentage rate (APR), which is adjusted in real time to correlate with the staking commission and the value of BNSOL to SOL. The platform will also allow users to redeem their tokens anytime, depending on the redemption waiting period.
Furthermore, Binance noted that it designed the BNSOL through its Stake Pool Program, which is managed by Binance Labs. The exchange stated that notable liquid staking token (LST) providers have tested the reliability of their stake pool several times.
Binance’s BNSOL is a testament to the relevance of the Solana network and its native token, SOL, in the crypto space. Last week, Robinhood wallets expanded to the blockchain, hosting the fifth-largest cryptocurrency by market cap.
However, Solana’s latest traction is yet evident in its price as the asset continued trending downwards amidst a wider market capitulation. At the time of writing, SOL traded at $128, down over 4% in the past 24 hours.
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