How to Stake Binance Coin (BNB) and Earn Passive Income

As one of the top five cryptocurrencies by market capitalization, Binance Coin (BNB) has become a cornerstone of the crypto ecosystem

As one of the top five cryptocurrencies by market capitalization, Binance Coin (BNB) has become a cornerstone of the crypto ecosystem, with a market cap of over $90 billion. Much like Ethereum, BNB Smart Chain uses proof of stake for consensus, and that means you can earn passive income with BNB staking.

In this guide, we’ll learn where to stake BNB safely. Options range from centralized platforms, such as the Binance exchange, to wallets that let you interact with the staking protocol directly. We’ll also discuss liquid staking tokens. First, let’s learn how to stake BNB directly.

Key Takeaways

How to Stake BNB

Staking BNB is a relatively straightforward process, although best suited to those who are familiar with using a crypto wallet. In this walkthrough, we’ll buy BNB, transfer to a wallet, and then connect the BNB staking app to choose a validator.

Like other crypto networks, BNB Smart Chain uses its native token (BNB) as a gas token to pay to process transactions on the blockchain. Staking will cost a small amount of BNB to interact with the staking contract to stake, withdraw, or restake.

Additional considerations include minimum staking amounts, unbonding periods, and slashing risks. We’ll cover these considerations and further details later in this BNB staking guide.

What is BNB?

BNB, or Binance Coin, is the native cryptocurrency of the BNB Smart Chain, a blockchain ecosystem developed by Binance, the largest cryptocurrency exchange in the world by trading volume. BNB is a utility token that plays a crucial role in the Binance ecosystem, acting as a fuel token for transactions and smart contract interactions on the BNB Smart Chain.

The BNB token was launched in 2017 as part of Binance’s initial coin offering (ICO), which raised $15 million. At the time, BNB was issued as an ERC-20 token on the Ethereum blockchain, but it was later migrated to the BNB Smart Chain, which was launched in 2020. The BNB Smart Chain is a fast, secure, and low-cost blockchain platform that enables the creation of decentralized applications (dApps) and supports the BNB token.

Compatibility with the Ethereum Virtual Machine (EVM) makes porting applications from other EVM chains easier, making BSC a popular low-cost alternative to Ethereum. As adoption grew, BNB has evolved to become more than just a utility token. Now, it is a widely accepted cryptocurrency, listed on numerous exchanges, and supported by countless wallets and payment platforms.

BNB Use Cases

With a market capitalization of over $90 billion, BNB has become one of the world’s top crypto assets, often ranking among the top five cryptocurrencies.

How Does BNB Staking Work?

To understand how the BNB Network and staking works, it’s essential to have a basic understanding of the underlying consensus algorithm. The BNB Smart Chain (BSC) uses a consensus mechanism called Delegated Proof of Stake (DPoS), which is a variant of the Proof of Stake (PoS) algorithm. This consensus mechanism governs transactions on the network. However, BSC combines PoS with Proof of Authority (PoA), making it a Proof-of-Staked-Authority (PoSA) blockchain.

Validators determine whether transactions are valid, using staked tokens as a form of collateral that ensures validators follow the rules. When staking BNB, you delegate to a validator, although some platforms obscure this part of the process for simplicity.

BNB Staking Overview

Staking Overview

लीज साखली टोकन्स (LSTs) फ्रम स्टेडर लैब्स एन्ड अंक्र क्यान बी यूज्ड इन प्लेस 오브 डायरेक्टली स्टेकिंग BNB.

BNB staking offers several benefits, including:

In a later section of this BNB staking guide, we’ll explore the safety considerations for stakers.

BNB Staking Rates

The yield on BNB staking is determined by the amount of BNB staked on the BNB Smart Chain. The more BNB that is staked, the lower the yield will be, and the less BNB that is staked, the higher the yield will be. Supply/demand dynamics drive yields.

However, validator commissions also influence the yields on BNB staking. When you delegate BNB to a validator, the validator charges a commission on the staking rewards generated, which can range from 7% to 10% or more, depending on the validator. This commission is deducted from the rewards, resulting in a net yield that is lower than the total yield generated by the validator.

For example, if the total yield is 8% APY, and the validator’s commission is 10%, the user’s net yield would be 7.2% APY (8% – 0.8% commission). In most cases, the advertised yield accounts for commission, but it’s prudent to check and also to understand that yields will vary based on the supply and