Just How Much Yield Does Binance.com Offer You For Being A BNB Holder?
A breakdown of yield products available to BNB holders
What’s BNB And Why Does Binance.com Care?
Binance.com is a global digital asset exchange that arguably has the deepest spot liquidity pools in the world. They created the Binance Coin (BNB) as the native coin of the Binance Chain. There are a variety of uses for the BNB asset.
This article presents a list of what I’ve determined to be the most convenient and highest yielding BNB products and is intended to help BNB holders determine which products to interact with for the highest expected returns on their BNB position.
BNB Flexible Savings: 0.22% Annualized Yield
This is the most straightforward BNB yield product, described as a flexible income high-cap (5,000,000 BNB per individual) savings account which earns a 0.22% estimated annual yield. Offered directly on Binance.com, this is a simple solution for someone who is holding BNB and is fine having custody of their asset on Binance.com. More information available here.
Discounts on Trading Fees: ~4–19% Yield
You can get discounts on Binance.com trading fees if you hold a certain amount of BNB and use BNB to pay the actual trading fees. While not phrased explicitly as a yield product, the primary use of BNB is in its trading fee discounts, therefore, given some assumptions, we’ll work it back out to yield on your BNB. This approach is not totally unfounded, while discounts are great, there is an opportunity cost to holding a particular asset.
Provided here is a breakdown of exactly how much you save, and the relative BNB yield for Spot, Futures, and Margin trading on Binance.com.
Spot Trading: ~19% Yield
When trading in spot markets (BTC/USDT) on Binance.com you get a 25% discount on Maker and Taker fees. To qualify you must hold a certain amount of BNB (based on your trading tier) and use BNB to pay the actual fees. Here I assume your trading level puts you at “VIP 2” tier, which is a moderate amount of trading. The relative yields will vary depending on your trading level. More information available here.
Assume: You trade 500BTC per month and hold 200BNB with a 0.08% Maker fee and you only trade with limit (“maker”) orders.
You pay 0.4BTC for your months trading and the 25% discount saves you 0.1BTC. To get this you had to hold 200BNB and pay 47BNB in fees (at today's prices). So in this case you return a 19% yield on your BNB holding (47BNB / 247BNB) in spot trading discounts — versus holding another asset that does not qualify for discounts. Pretty good.
Futures Trading: ~8% Yield
When trading futures you can get a 10% discount on trading fees when you hold a certain amount of BNB and pay fees in BNB. More information available here.
Assume: You trade 2500BTC and hold 200BNB with a 0.014% Maker fee and you only trade with limit orders.
You pay 0.35BTC for your months trading and the 10% discount saves you 0.035BTC. To get this you had to hold 200BNB and pay 17BNB (at today’s prices). You returned an 8% yield on your BNB holding in futures trading discounts. Not bad.
Margin Borrow Interest: ~4% Yield
When trading on margin you get a 5% discount on margin to borrow interest when you hold a certain amount of BNB and pay the interest in BNB. More information available here.
Assume: You qualify for VIP 2, hold 200BNB, and borrow 10BTC in your margin account for a 100 day period with a 0.03325% daily interest rate.
You pay 0.33BTC for your 100 day BTC loan and the 5% discount saves you 0.017BTC. To get this you had to hold 200BNB and pay 7.7BNB (at today’s prices). You returned a 4% yield on your BNB holding in margin borrow interest discounts.
Binance Launchpad: ~2.47% Yield
Binance Launchpad is a product that offers BNB holders exclusive access to fixed price allocation for a set of token projects offered on Binance.com. Below is a list of all the Binance Launchpad products and their individual historical performance measured as profits and losses (P&L) against BNB price.
Each Launchpad project’s P&L is calculated as yield = (today_price / starting_price) -1.
The P&L for the entire portfolio of Binance Launchpad projects is the average of the individual yields. If we assume the same amount of capital was deployed into each project, which is a reasonable assumption as Binance.com caps the level of individual participation, then we sum each project’s yield and divide by the 12 Launchpad projects to get Total Binance Launchpad P&L = +95.10% (measured against BNB price).
Not a bad return for approximately a year’s time, albeit a highly volatile portfolio. However, to measure BNB yield for this product, we must consider the amount of BNB required to access the portfolio and the resulting level of allocation. Assumptions below are given as best approximates as the Launchpad parameter has changed multiple times over the past year.
Assume: You hold 500BNB to get 10 “lottery tickets.” Historically, 10% of tickets get selected for project allocation. Each lottery ticket allows you to purchase a 200USD allocation in a given Launchpad project. So you get 1 ticket (10 tickets x 10%) which entitles you to a 200USD allocation. More info available here.
If you deployed your 200USD allocation randomly into one of the Launchpad projects in the total Launchpad portfolio calculated above you had a net expected return of 190.2USD (200USD x 95.10%). To obtain the allocation, and subsequent return, you had to hold 500BNB (for the 1 expected ticket) plus 200USD (initial project allocation). At today’s prices, you have returned a 2.47% yield on your BNB holding for exclusive Binance Launchpad project allocation.
USDX Minting Rewards: ~31% Annualized Yield (Variable)
The Kava lending platform, a Binance Launchpad project, is offering BNB holders yield to stake their BNB and mint USDX, the platforms USD-pegged stablecoin backed by the world's largest cryptocurrencies.
When BNB holders stake their BNB and mint USDX, they receive a yield based on the total amount of BNB staked and USDX minted. Below is a schedule of annualized BNB yields based on the total amount of BNB staked in Kava. It assumes all BNB stakers mint the same ratio of USDX. If you mint more USDX you will earn more.
At lower total, BNB staked amounts the annualized yields are exceptionally rich and become more modest as total staking amounts increase. At a medium amount of total BNB staked you return a 31% annualized yield on your BNB when staking for USDX minting rewards.
If you would like to learn more about USDX minting rewards for BNB holders, please stay tuned for more information. If you would like to participate in USDX minting rewards you can start earning now.
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Disclaimer: This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making investment decisions.
