The largest crypto exchange Binance published a cryptic message in its X(formerly Twitter) on August 29. Only five characters “BNSOL” were there in the post which sparked a flurry of speculations. The community started to wonder if Binance is bringing in a new Product or if there is some partnership going to happen. That was a very smart move by Binance, just dropping a teaser to get the community to wonder its next move.
Our Research about BNSOL
We did some research about BNSOL and found something very interesting that we shared with our readers. We were not confident but it looked like we found the right answer to “What is BNSOL”. Today Binance tweeted and confirmed that our research was right.
Today, Binance posted a tweet revealing what they were hinting at earlier. Binance posted “In a very short time, liquid staking will get a new fren—BNSOL”
What is BNSOL?
BNSOL is a liquid staking token (LST) that can be used for trading, lending or providing liquidity all while still earning rewards for your SOL staking.
If you use the staking feature on Binance, you know that staking your tokens locks them either for a specific period or in flexible staking. In both cases, you cannot use your assets for other purposes while they are locked. And if you have staked in some decentralized protocol, you get liquidity tokens, which is just a proof of your staking.
Binance introduced a unique staking method called Liquid Staking, which gives users more flexibility to use their SOL tokens even when staked, allowing them to generate revenue.
How Does BNSOL Work?
The process is similar using the earn feature of Binance. When a user stakes his SOL in Binance, he will receive BNSOL token in his spot balance. The BNSOL:SOL conversion ratio on Binance SOL staking page will determine how many BNSOL token he will receive.
One BNSOL is equal to one stacked SOL plus the accumulated staking reward till the Solana epoch ends. With time the value of one BNSOL will progressively exceed that of one SOL. With every new Solana epoch, Binance updates the conversion rate, which usually takes two days. Once you stake SOL, you receive BNSOL in your spot wallet, which you can transfer to the Binance Web3 wallet to use with other Binance products or external dApps.
You can redeem the liquid staking token for SOL based on the current BNSOLconversion ratio, similar to the staking process. However, it is noteworthy that it might be possible that the redemption takes up to 4 days due to processing restrictions.
Looking Ahead!
With BNSOL, Binance is changing the way users stake their SOL to receive interest. Now, with this liquid staking feature, users will be able to generate revenue from their SOL staking and use the tokens for other purposes, both at same time. This is even more advanced than performing a stake on decentralized protocols.
How much fun is it to use your staked tokens for lending or trading?
