Staking on Centralised Exchanges

We have covered staking on a decentralised platform already, now we will cover staking on a centralised platform. What are the advantages and what are the disavantages?

Advantages of staking on a centralised platform:

In general staking on a centralised platform is easier, as you do not need to create a non custodial wallet like Metamask for example.
You have acces to coins and tokens from all kind of chains and networks all in one account, without having to switch networks once.
A non custodial wallet has a seed phrase you can lose, when you lose it, you are in a bit of a mess.
With as centralised exchange you can always recover your login information, making it safer and more dangerous at the same time.

Disadvantages of staking on a centralised platform:

The annual percentage rate (APR) is lower most of the times.
Your tokens are on a centralised exchange, this is a risk, because you do not own them directly.
When a centralised exchange disables the ability to withdraw your tokens, or unlists your tokens, you will not be happy.

Whether you stake on a dex (decentralised exchange) or a cex (centralised exchange), you will earn more
than when you just choose to HODL (hold on for dear life). Add the compound effect and you definitely want to stake.

Now let's see what the different exchanges have to offer.

How to earn money by staking on Binance

Binance is by far the biggest exchange out there. It is not more than logical we get started here with the staking options on centralised exchanges. Binance offers quite a lot of options to let your tokens earn extra tokens.

Staking options at Binance

When you go to your spot account, you will see the image above. We had to cut the numbers out, so it would fit on the page. Besides each coin, you see if there is a option to earn extra coins on your investment.
Simply look for the earn button next to trade. If Binance has options for the chosen coin, it will show in the drop down menu, like shown with BNB. BNB has the most earning options, so let's go through them one by one.

Staking options Binance

Flexible savings (not available for BNB)
Liquidity farming
Locked staking
Auto-invest
BNB Vault
DeFi staking
Dual Investment

1. Flexible savings Binance explained

Flexible savings is the easiest way to earn some extra tokens with your investment. Having said that, it is also the way with the least amount of interest on it. When you have done your due dilligence on a coin and you want to be able to sell it anytime you want, while still earning some interest, flexible savings is the way to go. Let's see how it's done.

Choose flexible savings in the dropdown menu

The first step will be to pick the flexible savings option in the dropdown menu. When a coin has that option, you can find it under earn.
Please note, not every coin has earning options, so when earn does not show on the right of the coin, it is not available.

The flexible savings menu will appear

The flexible savings menu will appear. Here you can choose how much of your tokens you want to put in your flexible savings account. You can see there is a minimum of 0.1 Matic, meaning you can earn interest on a very small amount already.

On the right hand side you can see the APY rate. As you can see you will earn 6% on the first 100 Matic and 1.5% on everything beyond that amount. Once you have filled in a number, you will also see the estimated interest you will earn. Last but not least you have to check the checkbox to show you have read the Binance Savings Service Agreement.

Once you have done that, you will start earning interest on the Matic on your savings account.
The interest will be paid out daily in your spot wallet. You may compound (reinvest) the interest, meaning you take the interest and put it also on your savings account. This way you comppound your interest, which will give you a higher return on your investment.