Lending/Loans

General

Name
Binance

Based in
It is difficult to find clear information on the location of Binance's headquarters. Binance's corporate structure is opaque, with its holding company widely reported to be registered and domiciled in the Cayman Islands. A Binance spokesperson calls it "decentralized" when asked about the location and that it "works with a number of regulated entities around the world".
Unknown

Founded
2017

Currencies

Coins
130+

Fees

Lending Fees
0%

Borrowing Fees
Interest is calculated hourly

Liquidation Fees
Unknown

Versions

Desktop

Web

Android

iPhone

Binance

Any crypto trader, beginner or seasoned, looking forward to trading or lending in crypto, can try out Binance as it is the easiest and one of the least expensive ways to do so. The platform is secure and straightforward to use and allows everyone to search for popular coins and start lending or borrowing crypto right away.

Pros

  • It supports a wide range of currencies

  • The trading fees are amongst the lowest globally

  • The exchange has a good reputation and offers multilingual support

  • It is a good exchange for beginners and experts

  • Offers several crypto assets for lending

Cons

  • Has been in the regulators crosshairs several times

About Binance

Binance is currently the world’s largest cryptocurrency exchange that offers a comprehensive crypto ecosystem, including all major services one can ask for from a crypto platform, such as access to 24/7 trading, wallet, borrowing and lending, etc. This review looks at the various options Binance offers its users who want to lend or borrow crypto while discussing its advantages and disadvantages.

QUICK FACT

Binance Lending – the largest platform to lend, trade, earn & do more with crypto assets

Where is Binance Based, and How is it Regulated?

While Binance was initially located in China, the information about its present headquarters and offices is not transparent. Its CEO, Changpeng “CZ” Zhao, even went on to say that they do not have a headquarters but do have people working from 50 countries around the world.

The same kind of ambiguity stays concerning regulatory matters with Binance. However, in recent times, Binance has been thinking of establishing itself as a centralised and licensed financial institution, as per Zhao’s words. Binance’s relationship with most regulatory authorities have not been smooth; it perhaps fears that crackdowns by regulators could set back the successful business it has set up in four years. It has even hired high profile officials for dialogues with regulators. It has been seriously thinking of turning itself into an out-in-the-open financial institution under appropriate regulations and with public headquarters. However, it could be against the cryptocurrency ethos of being a decentralised and private financial network.

Binance Founders & Team

Incidentally, the aforementioned Chinese individual, Changpeng Zhao, who is known in the crypto world as CZ, is the creator of Binance. Cryptocurrency legislations are strict in China. Hence, Binance was forced to leave China and set up its base in Japan. Interestingly, CZ had previous experience building trading systems on the Tokyo Stock Exchange, which helped Binance succeed.

Binance Sign Up and Verification

Users have to sign up on the Binance Platform to use its functions. However, registering on the platform is easy.

• Visit the official Binance Homepage and click on the ‘Register Now’ button.
• Enter your email address and select a strong password.
• On confirming the email address, the Binance account will be ready for use.
• The new user would need to set up 2FA as an additional optional security feature when they log in for the first time.
• Enter the mobile number and complete the setup.

Following the registration, the user is ready to trade, deposit, withdraw, lend, or borrow on Binance.

Binance Interest Rates

Before reviewing how to lend out digital assets and earn interest, here is a quick look at the interest rates. The Cross Collateral Interest rate depends on the user’s VIP level, ranging from VIP 0 to VIP 9. The platform allows cross collateral between two cryptos, BTC and ETH, and the fiat currency, EUR. However, one can borrow BUSD and USDT using these collaterals. The current daily interest rate varies between 0.048% to 0.24%. There are different borrowing limits for each level.

Lending Out Digital Assets on Binance

Here is how to lend digital assets and earn interest. Binance Earn offers a range of products facilitating convenient crypto holdings. The options include Flexible Savings, Fixed Savings, Launchpool, and BNB Vault.

Binance Earn offers two types of earnings, Guaranteed and High Yield. Those new to crypto would find the Guaranteed option the best. Users can click on the drop-down menu to find their desired crypto.

Binance Earn offers two types of savings accounts, Flexible and Fixed Savings. These products are similar to a typical bank’s fixed deposits and enable users to deposit crypto and earn daily interest on their dormant funds. However, Flexible Savings allows users to withdraw their funds at any time, whereas the Fixed Savings product requires them to lock their assets for a fixed period to earn a higher return.
Launchpool is the ideal option for experienced users to farm new assets. And BNB Vault enables holders to invest in centralised and decentralised finance products to maximise yields.

How to Get a Collateralised Loan And Pay Interest on Binance?

Here is how to borrow a collateralised loan and pay interest on Binance.

Click on the Finance option followed by Crypto Loans to start borrowing.

• Choose the asset you wish to borrow and enter the required amount.
• Choose the respective collateral asset and enter the amount.
• Select the loan term.
• Now proceed with the borrowing by confirming the amount, collateral, interest, and repayment terms.
• Confirm the information after going through the service agreement and click on the Confirm option.

The next step is to adjust the Loan-to-Value.

• Click on ‘Ongoing Orders’ followed by Adjust LTV.
• Use the LTV bar to adjust the LTV. Alternatively, one can add/remove the collateral.
• Click on the respective option to confirm the LTV adjustment.

Binance Supported Coins As Collateral

Binance offers more than 200 coins to trade, deposit, or withdraw on the exchange. They include BTC, ETH, LTC, XRP, BCH, BNB. BUSD, and many more. However, all these coins may not be available on the collateral platform. Still, enough coins are available on the Binance Earn platform as collateral for any user, including the popular ones such as BTC, ETH, LTC, DOGE, and USDT.

Binance Fees

Binance allows P2P transactions between USD and cryptocurrencies such as BNB, BTC, BUSD, DAI, ETH, and USDT. The P2P fee is 0.35% of the transaction amount for the maker alone. The taker does not have to pay any fee.

The Liquidity Swap fee ranges from 0.06% to 0.20% of the swap amount depending on the user’s VIP level, with VIP 9 attracting the lowest rates and the VIP 0 level the highest. The current fees can be checked out here.

Binance Security/ Hacks

Though Binance has largely maintained its image of being a secure exchange, it went through a major security hack on May 07, 2019. The business lost nearly 7000 Bitcoins amounting to $40 M. However, Binance confirms that all its losses are covered under its emergency insurance fund. Besides, its growing popularity and assets under management have often invited regulators’ attention to the platform, one of the most recent ones being in Singapore.

Conclusion

One of the best aspects of Binance is that it is convenient for both beginners and advanced crypto users alike. Despite its drawbacks, Binance is a popular crypto exchange that allows trading, depositing, withdrawing, or lending funds conveniently. It enables users to earn attractive interest on their collateral. They can also avail loans against their collateral. The user-friendly platform has earned the trust of numerous loyal users in a short time.