The U.S. affiliate of cryptocurrency exchange Binance said Wednesday that it would launch an Ethereum staking program offering annual percentage yields up to 6.0%. Binance US’s new service will require only 0.001 Ethereum to be used, as opposed to direct staking on Ethereum. This would have required 32 Ether (ETH). Brian Shroder (CEO of Binance US) spoke out about the new development.
“ETH plays a crucial role in the wider Web3 ecosystem. We are delighted to offer ETH staking at some of the best APY rewards in this industry as the Ethereum network transitions towards The Merge.
Binance US’ auto restake allows compounding of returns, which in part boosts staking yields. Users cannot currently unstake ETH. Rewards will not be distributed until Ethereum transitions from a proof of work blockchain to proof-of stake through the Merge upgrade scheduled for Sept. 15. Users will be able then to withdraw staked ETH through the future “Shanghai Upgrade”, contingent upon successful Merge completion.
There is no guarantee that the upgrade will go smoothly due to its complex nature. The upgrade can result in the loss of principal or the long-term return of funds for users’ funds. Binance US claims it does not have control over how much ETH investors will receive back and the final amount. As of the publication date, 21.6% Ethereum nodes are still not synced to The Merge upgrade.