On Wednesday, the US subsidiary of cryptocurrency exchange Binance will launch an Ethereum staking program with annual returns of up to 6 percent. announced. Within the scope of the new service offered by Binance US, only 0.001 ETH will be sufficient for this transaction, as opposed to 32 Ether (ETH) required for direct staking on the Ethereum network. Binance US CEO Brian Shroder used the following statements about the development:
“The role of ETH in the Web3 ecosystem is very important. As Ethereum Merge approaches, we are excited to offer ETH staking with some of the highest APYs (annual yield) in the industry.”
Staking returns are partially supported by features such as Binance US auto-repurchase, which allows the yields to be consolidated. However, these rewards will not be distributed until Ethereum transitions from a proof-of-work blockchain to a proof-of-stake with the Merge update scheduled for September 15. Then, users will then be able to withdraw their staked ETH via an onward “Shanghai Update” based on successful completion of the Merge.
Due to the complexity of Merge, there is no guarantee that the migration will be smooth. Therefore, user funds run the risk of long-term refunds or loss of principal if the upgrade fails. Binance US also stated that it has no control over the amount and form that staked ETH traders can get back. Also, at the time of writing, 21.6 percent of Ethereum nodes are not yet synchronized with The Merge upgrade.