When first trading and investing in cryptocurrencies, people often start with Spot Trading. This is one of the simplest ways to buy and sell financial assets. However, many feel uncertain about what to do with their idle digital assets. Therefore, passive investing can be a good option – and Binance Earn is a great platform to start.
In this article, we will cover the basics of passive investing, the potential benefits and limitations. We will also provide a quick guide on how to start earning from your cryptocurrency assets with Binance Earn.
What is Passive Investing?
Passive investing is a way to earn profits without putting in too much effort. This means investing money in things like stocks or cryptocurrencies and letting them appreciate over time. You don’t need to check constantly or make multiple buy and sell transactions. This approach has become popular not only in traditional markets but also in the cryptocurrency space.
With passive investment methods, cryptocurrency holders can earn a stable income from digital assets without having to trade frequently. In the cryptocurrency space, you can generate passive income through various methods. Each method carries its own risks and benefits. Some common examples include staking, yield farming, lending, and borrowing.
Advantages of Passive Investing
Earn rewards: Users can receive rewards and increase their assets through passive investment methods, regardless of market fluctuations.
Consistency: Passive investing typically follows a pre-established investment strategy, allowing investors to maintain a consistent approach over time without frequent adjustments or market timing.
Time efficiency: Passive investing requires less time and effort compared to active trading. Therefore, this method is suitable for investors who prefer a simple approach and do not want to spend much effort managing their portfolios.
Limitations of Passive Investing
Market risk: Passive investing differs from active management – it is inherently responsive to changing market conditions. Therefore, investors may be more susceptible to market downturns or prolonged periods of underperformance.
Limited flexibility: Depending on the chosen strategy or product, investors may not have quick access to their assets.
Market concentration: Some passive investment methods may be highly concentrated in a few assets or large-cap sectors, increasing vulnerability to risks or market downturns affecting those sectors.
What is Binance Earn?
Binance Earn is a great place for users to earn passive income from holding cryptocurrencies. This platform offers a variety of products to meet the needs of different investors, from beginners to experienced users.
Binance Earn offers users two ways to increase income: Simple and Advanced. You can choose to invest cryptocurrencies for predictable profits or opt for higher-than-average returns but with corresponding risks to your principal investment.
Simple Earn offers Flexible Products, Fixed Products, ETH Staking, SOL Staking, and Soft Staking. Similar to depositing money in a bank, you can deposit cryptocurrencies and receive passive rewards. Advanced Earn includes Dual Investment, Dual Investment RFQ, Smart Arbitrage Trading, and Yield on Chain. These products allow you to leverage market insights by applying various financial strategies.
How to Get Started Using Binance Earn?
1. Log in to your Binance account and find [Earn] in the top menu.
2. You will be redirected to the Binance Earn interface. Here, you can view available products such as Simple Earn, Advanced Earn, and Loans.
On this page, you will find a summary of the assets you hold and an estimate of your earnings on the last day.
3. Scroll down to find the list of available products. Here, you can view different assets along with their APR and estimated duration. You can also use the search function or filters to look for specific assets.
4. To start earning from your assets, you need to select a product and sign up. Add the amount you want to use, read the summary, and click Confirm when ready.
You can view the product regulation tab at the top for more details about each product.
5. Flexible products allow you to withdraw funds at any time. Fixed-term products will require you to lock in your funds for a set period. Below is an example of a Fixed-term product with different lock-in periods.
How to Start ETH Staking on Binance?
1. Open the Simple Earn section on Binance. You will see different staking options such as ETH, SOL, and Soft Staking. Click on [ETH Staking] to get started.
2. When you enter the ETH Staking page, you will see information such as reference APR, conversion rate, and total ETH staked. This information gives you an overview of potential rewards and the current status of the staking pool.
3. To start staking, click [Register] and enter the amount of ETH you want to stake. In return, you will receive WBETH (Wrapped Beacon ETH)—a token representing the staked ETH along with rewards. Read and agree to the terms, then click [Continue]. You can view the product regulation tab at the top for more details about each product.
. WBETH allows you to continue receiving staking rewards while still using the staked ETH. Unlike traditional staking which locks your ETH, WBETH can be traded and transferred. You can sell, transfer to a personal wallet, or even use it on DeFi platforms outside of Binance while still earning staking rewards.
5. If you want to withdraw ETH, go to [ETH Staking] and then click [Withdraw]. Enter the amount of ETH you want to withdraw from your BETH or WBETH balance and then click [Withdraw]. You will receive ETH based on the conversion rate of WBETH to ETH at the time you withdraw.
How to Start SOL Staking on Binance?
1. Open the Simple Earn section on Binance. You will see different staking options such as ETH, SOL, and Soft Staking. Click on [SOL Staking] to get started.
2. When you enter the SOL Staking page, you will see information such as reference APR and conversion rate. This information gives you an overview of potential rewards and the current conversion rate between SOL and BNSOL.
3. To start staking, click [Register] and enter the amount of SOL you want to stake. In return, you will receive BNSOL (Binance Staked SOL)—a token representing the staked SOL along with rewards. Read and agree to the terms, then click [Confirm]. You can view the product regulation tab at the top for more details about each product.
4. BNSOL allows you to continue earning staking rewards while still using the staked SOL. Unlike traditional staking which locks your SOL, BNSOL can be traded and transferred. You can sell, transfer to a personal wallet, or even use it on DeFi platforms outside of Binance while still receiving staking rewards.
5. If you want to withdraw SOL, go to [SOL Staking] and then click [Withdraw]. Enter the amount of BNSOL you want to exchange from your BNSOL balance. Read and agree to the terms, then click [Confirm]. You will receive SOL based on the conversion rate of BNSOL to SOL at the time you withdraw.
How to Start Soft Staking on Binance?
1. Open the Simple Earn section on Binance. You will see different staking options such as ETH, SOL, and Soft Staking. Click on [Soft Staking] to get started.
2. Click on [Activate]. Make sure you have read and agreed to the Soft Staking Terms (and the associated risk warnings) before clicking [Start Earning].
3. By participating in Soft Staking, you can receive rewards generated through the blockchain’s staking mechanism, also known as Proof of Stake (PoS). Rewards are typically paid in the native token of the blockchain (unless otherwise specified).
Summary
Passive investing with cryptocurrencies can provide significant opportunities for individuals to increase their holdings over time without much effort. Binance Earn allows users to access a variety of products designed to maximize passive income while minimizing risk.
