Yesterday, the Binance exchange announced that it has started staking the DAI stablecoin with interest of up to 12%.
— Binance (@binance) August 19, 2020
With this new service users will be able to lock at least 100 DAI and obtain in return an interest ranging between a minimum of 5.8% and a maximum of 12% for at least one month, with a maximum of 100 thousand DAI per user.
The limit is 1 million to earn interest of 12%, 2 million for 10% which has a time of one week, and no limit for the minimum threshold.
The advantages of staking DAI on Binance
The advantages offered by Binance include the following:
Ease of use, as there is practically nothing to do except send assets to the staking fund, while also avoiding the cost of transactions;
Security of funds: the funds are managed directly by the exchange which has full control in the event of problems and the possibility of reducing the associated risks;
High returns: Binance offers a fairly high interest rate which, net of transaction costs, is higher than other protocols.
Nevertheless, Binance points out that there is always a risk, namely the security risk of the various smart contracts in which the exchange will place funds.
Real DeFi or just marketing?
It is worth noting that this new offer, called DeFi Staking, has a very misleading name because it has nothing to do with decentralized finance (DeFi) since the funds are managed by a centralized exchange and not by users, so the decentralization parameter disappears.
And in fact the complaints from this point of view are highlighted in the comments of the news, demonstrating how the word DeFi is increasingly used incorrectly or as a synonym for easy money making.
At the same time, another exchange, Coinbase, last month started the DAI Rewards program, which allows users, without locking the stablecoin, to get 2% on it