On Wednesday, the U.S. subsidiary of cryptocurrency exchange Binance announced that it would introduce an Ethereum staking program with annual percentage yields of up to 6.0%. Unlike direct staking on the Ethereum network, which would require 32 Ether (ETH), only 0.001 ETH would be required under the new service introduced by Binance US. Regarding the development, Brian Shroder, CEO of Binance US, 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 staking yields are in part boosted by features such as Binance US’ automatic restake, which enables the compounding of returns. However, users cannot unstake ETH at the moment, and rewards will not be distributed until Ethereum first transitions from a proof-of-work blockchain to proof-of-stake through the upcoming Merge upgrade scheduled for Sept. 15. Then, through a future “Shanghai Upgrade” contingent on successful Merge completion, users will then be able to withdraw their staked ETH.Due to the complicated nature of the upgrade, there is no guarantee that the transition will be smooth. Users’ funds are, therefore, subject to risks such as the prolonged return of funds or loss of principal if the upgrade fails. Binance US says it has no control over the manner and ultimate amount of staked ETH investors can receive back. At the time of publication, 21.6% of Ethereum nodes remain unsynced to The Merge upgrade.
