Binance has officially announced its lending service which is expected to kick off on the 28th of August, at exactly 6:00 UTC. The announcement initially began with a tweet from Binance CEO Changpeng “CZ” Zhao, where he asked his near 450 thousand followers if the idea of passive crypto income was a great idea, adding that Binance might have something up its sleeves, in that regard.
Would you like to earn #crypto while you sleep?
Keep an eye on @binance today.
— CZ Binance (@cz_binance) August 26, 2019
Binance Lending is expected to allow crypto users, who hold the supported assets, lend these assets and earn up to 15% annual interest.
According to Binance, users will only have access to lending Binance’s BNB, USDT and Ethereum Classic (ETC) and earn interests from them. For BNB, the annual interest rate would be pegged at 15 percent while USDT will be 10 and ETC, 7.
Further details include a few limits. For example, every user will have different limits for the three assets. BNB has been set at 500 while ETC and USDT have both been set at 1,000 and 1,000,000 respectively. Binance has also set blanket limit caps for individual assets. BNB was set at a maximum of 200,000 BNB, USDT at 10,000,000 and 20,000 ETC.
Last month, Binance announced that it would be enabling margin trading on its platform. This new feature will allow the exchange to compete favorably with Bitmex, which had since somewhat established itself as the go-to platform for Bitcoin margin trading. Binance had announced that assets to be supported include BTC, ETH, XRP, BNB, TRX, and USDT. At the time, Binance Co-Founder, Yi He, was quoted saying:
“With margin trading being one of the most requested services from our community, this is a testament to the large market demand from retail and institutional traders alike and its promising possibilities in the future.”
Shortly before Binance Lending was made official, the exchange announced that it would be increasing its daily interest rates for ETC to 0.04% from 0.02%.
In addition, it might be important to note that this could be a win-win for users who are a part of the Binance Launchpad as their entire balance, including Binance Lending balance, will be considered when making Launchpad calculations.
Binance Lending Service Agreement
The agreement posted on the Binance website, details eight different points ranging from authorization to avoidance of risks involved in cryptocurrency lending and investment. For example, it states that authorization and distribution of leveraged assets will be specifically dealt, as Binance rules stipulate. It also mentions certain points that may border on anti-money laundering (AML) and fraud prevention methods.
The agreement however further adds that Binance can shut down its lending platforms whenever it chooses to. It does not state that customers will be notified even though it might be reasonable to think so.
The Binance Lending Service Agreement then ends with the following disclaimer:
“Due to network delay, computer system failures and other force majeure, which may lead to delay, suspension or deviation of Binance Lending service execution, Binance.com will use commercially reasonable effort to ensure but not promise that Binance Lending service execution system run stable and effectively. Binance.com does not take any responsibility if the final execution doesn’t match your expectations due to the above factors.”