DeFi 10101 September 2021

DeFi Staking Explained

DeFi Staking

Summary

  • Staking is a way of earning passive income
  • Token holders earn rewards and interest
  • Staking takes place on a decentralized exchange

Staking is the act of holding crypto tokens to earn a passive income. It presents a win-win opportunity for DeFi tokens owners and the DeFi protocol operator. As the token holder earns rewards and interest from staking their tokens, the protocol gets access to liquidity.

When a token holder stakes their tokens in a decentralized exchange (DEX), they are referred to as liquidity providers or token stakers. From this move, the token owner earns a percentage of every transaction made through the decentralized exchange on top of LPTs (Liquidity Provider Tokens).

Binance is a leading crypto trading platform that allows users to stake different DeFi assets. Some of the assets you can stake include BUSD, USDT, USDC, SXP, and BNB, with an APY of 5.09% to 8.49%.

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