Binance reveals details of upcoming Solana liquid staking token
Quick Take
- Binance will unveil a Solana staking product by the end of the month, which will allow users to continue using their collateral while earning staking rewards.
Binance, the world’s largest crypto exchange, plans to unveil a Solana staking product by the end of September, according to an announcement on Tuesday.
The so-called BNSOL tool will enable users to stake SOL tokens to earn a portion of fees paid out by the network and mint a liquid staking token that can be used while those underlying tokens are locked up.
“Unlike native staking, which locks up assets, BNSOL allows users to unlock liquidity, enjoy continuous reward accumulation, and seamlessly participate in both the Binance platform and the broader DeFi ecosystem, making it an ideal solution for those looking to maximize the potential of their staked Solana tokens,” Vishal Sacheendran, head of regional markets at Binance, said in a statement.
The utility of the liquid BNSOL token will ultimately rely on its adoption across the Solana-based decentralized finance sector.
A liquid staking token is a type of cryptocurrency that represents a user's assets locked up in a proof-of-stake blockchain like Solana or Ethereum, which allows them to trade and access DeFi platforms while their underlying collateral is locked up.
Binance is programming the tokens with a “dynamic APR” that will be adjusted based on current Solana staking payouts and follow a commission ratio related to the amount of accrued rewards and value of BNSOL relative to SOL. Users will be able to redeem their tokens subject to a redemption waiting period.
Binance will officially announce the launch of the protocol later this month.
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