On Wednesday, the US subsidiary of cryptocurrency exchange Binance announced that it will launch an Ethereum (ETH) staking program with an annual percentage yield of up to 6.0%. Unlike placing bets directly on the Ethereum network, which will require 32 ETH, the new service launched by Binance US will require only 0.001 ETH. Regarding the development, Binance US CEO Brian Schröder said:
“ETH plays a vital role in the wider Web3 ecosystem. As the Ethereum network continues to move towards merging, we are thrilled to offer ETH staking with some of the highest APY rewards in the industry.”
The staking yield is partly enhanced by features such as automatic restakes from Binance US, which enables compounding of returns. However, users cannot sell ETH at this time, and rewards will not be distributed until Ethereum transitions from the Proof-of-Work blockchain to Proof-of-Stake via an upcoming merge upgrade scheduled for September 15th. does it Then, contingent upon successful completion of the merge via a future “Shanghai Upgrade”, users will then be able to withdraw their staked ETH.
Due to the complex nature of the upgrade, there is no guarantee that the transition will be smooth. Therefore, users’ funds are subject to risks, such as long withdrawal of funds or loss of principal if upgrade fails. Binance US states that it has no control over the manner in which investors can finally get back the ETH staked. At the time of publication, 21.6% of Ethereum nodes remain unaffiliated to the merge upgrade.
