The US subsidiary of Binance has today announced that it will introduce an Ethereum (ETH) staking program ahead of the upcoming Merge upgrade. The staking program will have an annual percentage yield (APY) of up to 6.0%.
Unlike direct staking on the Ethereum blockchain which normally requires one to have at least 32 ETH to participate, the Binance staking will only require a minimum of 0.001 ETH.
While commenting on the new development, the CEO of Binance Brian Shroder said:
“ETH plays a critical role in the broader Web3 ecosystem. As the Ethereum network continues to transition towards The Merge, we are thrilled to offer ETH staking with some of the highest APY rewards in the industry.”
The program’s staking yields will be in part enhanced by features like the Binance US’ automatic restake that allows for compounding of returns.
However, those who stake their ETH at the movement will not be able to unstake the ETH until Ethereum performs its first transaction on its Proof-of-Stake (PoS) blockchain once the Merge upgrade takes place.
The merge is slated to take place on September 15 although the high Ethereum hashrate may result in the upgrade happening earlier than expected. Users will be allowed to withdraw their staked ETH from the Ethereum network after another upgrade referred to as the “Shanghai Upgrade” which depends on the successful completion of the Merge upgrade.
Nevertheless, because of the complexity of the upcoming Merge upgrade, there is no guarantee of a smooth transition and users’ funds are subject to risks such as protracted return on the invested funds or loss of the funds in case the upgrade fails.