We all knew this was coming. We all knew that Binance would finally join the cryptocurrency lending party. Binance will allow cryptocurrency enthusiasts to earn interest on their cryptocurrency assets.
Binance, a significant player in the cryptocurrency markets will likely draw considerable interest from retail customers for this new offering. As such, the cryptocurrency exchange will become more of a few key players and cement their status as sort of the Amazon of the cryptocurrency sector.
Just like Amazon did with AWS and AWS partners, Amazon learns what its customers need, what their partners provide, and how they can use that knowledge to serve their customers and the world at large better.
Binance partnered with crypto lending institutions in the past, and now, it will take on that role as well.
Binance Lending: What You Need To Know
The corporation made a significant announcement on August 26, 2019, stating that Binance Lending will start accepting customers from August 28, 2019.
The Malta-based exchange will start with a few coins, can you guess what their lending portfolio will begin with in the early stages of its program?
If you guessed, USDT, ETC, and BNB, you would be 100% accurate.
Binance will start to offer these as options for lending where individuals may begin to earn on their cryptocurrency assets.
Interest rates will range from 7% to 10% or more for these different assets.
The lending program will only be rolled out in a limited capacity, and there are limits for the quantity of BNB, ETC, and USDT allocated for lending.
Each user’s account on Binance will have an initial hard cap for BNB-, USDT- and ETC-denominated lending products at 500 BNB, 1,000,000 USDT, and 1,000 ETC, respectively. Per these overall restrictions, individual account restrictions would also apply. Users will have a set limit of BNB, USDT, ETC that they may lend.
The Crypto Lending Wars
We slowly see the rise of the crypto lending wars.
Institutions ranging from BlockFi to Celsius, and from general decentralized finance options like Dai and Compound all vie for the facilitation of crypto lending in some form or fashion.
While yields will be a way to attract customers, it remains to be seen how it can all be done in a fully automated, safe, and decentralized manner.