Binance, the largest crypto spot exchange in the world, has made another break-through in the crypto space. It has announced a crypto-lending platform which will begin on 28th August 2019.
Binance crypto lending platform will begin with a short period fixed return on Binance [BNB] Coin, USDT (Tether) and Ethereum Classic [ETC]. Starting with a 14-Day fixed period, it will provide an annualized return of 15%, 10%, and 7% respectively.
The amounts have been divided into lots of 10 BNB, 100 USDT, and the smallest 1 ETC. It will be allotted on a first-come, first-serve basis.
Moreover, while it seems like a soft start, Binance is effectively beginning with about $30 million in crypto-lending. Furthermore, the annual interest offered is far higher than the return from banks.
Changpeng Zhao, the CEO of Binance, noted,
This will also increase the availability of funds to lend to Margin traders, so expect the (previously low) margin limits to increase a bit.
Again, @binance is just a matchmaker.
The new space is designed to work to simultaneously with the margin trading platform. The margin traders would pay the interest charged for lending. Hence. Binance will act as a mediatory. CZ summed it up in his tweets,
… end on @binance goes to Margin borrowers, who pay the interests. Simple. Very different from other guaranteed-return schemes. We don’t have to look for another place to invest. That’s why Margin is out first…
Nevertheless, Binance is not the first platform to begin crypto-lending. It is already offered on a couple of exchanges especially with margin trading platforms like BitMEX, Bitfinex, Poloniex and so on. They offer to lend in a variety of cryptocurrencies. Binance is also expected to add support for more tokens on its lending platform.
Do you think crypto-lending on exchanges is a better option or staking on PoS coins? Please share your views with us.
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Nivesh from Engineering Background is a full-time Crypto Journalist at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com