Binance propose 30 days Locked Staking of LTO tokens with an APY of 10.00%, which is an incredible level.
Leasing on our node on the other hand is currently bringing you an APY of 3.69%.
So not as great that announced.
Yet there is a few things to consider when staking on Binance:
First thing, each time you lock up your LTO for 30 days, this means that at the end of the period, they are released. You'll then have to stake them again manually. If you don't do it right away, you could miss staking time and this will eat in your earnings.
When you lock up for 30 days, you will then earn rewards during 30 days. A thing to note is that this duration will only start at the start of the next day, not right away. There will then be a downtime of at least a day between each locking period. Also, after those 30 days, Binance does a 3 days redemption period during which you aren't earning rewards either.
With all those downtimes between each periods, this means if you don't miss a day to re-stake each time, the effective APY of Binance is actually 8.3% (if you do not miss a day of re-staking).
For a full breakdown by the exemple, here's a timeline of a staking on Binance:
|Staking period||Dates||Rewards for staking on Binance||Comparison with leasing with our node|
|Period 1||Stake Date||2021 Jun 24|
|Value Date||2021 Jun 25|
|Interest End Date||2021 Jul 25|
|Redemption Date||2021 Jul 29||100.82 LTO||100.36 LTO|
|Period 2||Stake Date||2021 Jul 29|
|Value Date||2021 Jul 30|
|Interest End Date||2021 Aug 29|
|Redemption Date||2021 Sep 02||101.65 LTO||100.72 LTO|
|Period 3||Stake Date||2021 Sep 02|
|Value Date||2021 Sep 03|
|Interest End Date||2021 Oct 03|
|Redemption Date||2021 Oct 07||102.49 LTO||101.08 LTO|
|Period 4||Stake Date||2021 Oct 07|
|Value Date||2021 Oct 08|
|Interest End Date||2021 Nov 07|
|Redemption Date||2021 Nov 11||103.33 LTO||101.44 LTO|
|Period 5||Stake Date||2021 Nov 11|
|Value Date||2021 Nov 12|
|Interest End Date||2021 Dec 12|
|Redemption Date||2021 Dec 16||104.18 LTO||101.81 LTO|
|Period 6||Stake Date||2021 Dec 16|
|Value Date||2021 Dec 17|
|Interest End Date||2022 Jan 16|
|Redemption Date||2022 Jan 20||105.03 LTO||102.17 LTO|
|Period 7||Stake Date||2022 Jan 20|
|Value Date||2022 Jan 21|
|Interest End Date||2022 Feb 20|
|Redemption Date||2022 Feb 24||105.90 LTO||102.54 LTO|
|Period 8||Stake Date||2022 Feb 24|
|Value Date||2022 Feb 25|
|Interest End Date||2022 Mar 27|
|Redemption Date||2022 Mar 31||106.77 LTO||102.91 LTO|
|Period 9||Stake Date||2022 Mar 31|
|Value Date||2022 Apr 01|
|Interest End Date||2022 May 01|
|Redemption Date||2022 May 05||107.65 LTO||103.28 LTO|
|Period 10||Stake Date||2022 May 05|
|Value Date||2022 May 06|
|Interest End Date||2022 Jun 05|
|Redemption Date||2022 Jun 09||108.53 LTO||103.65 LTO|
|Period 11||Stake Date||2022 Jun 09|
|Value Date||2022 Jun 10|
|Interest End Date||2022 Jul 10|
|Redemption Date||2022 Jul 14||109.42 LTO||104.02 LTO|
Oh, also the amount of LTO that can be locked in the staking product on Binance is limited. Don't be surprised one day when you want to lock them again after the end of a staking to see the message Sold out, preventing you to stake until place is freed up by someone else, forcing you to regulary check if you can stake again. Starting to sound tiring right ?
Obviously, Binance run their own validator nodes with the coins you stake, which provide a good chunk of the rewards your earnings there. But to provide a higher APY, this means they also do something else with them. By staking, you provide coins that they can lend to margin traders, this provides liquidity. It's not really bad, but the opposite is better, reducing liquidity brings coin scarcity, which make buying a coin more of a premium and brings price up !
By not staking on Binance, you're helping yourself and everyone else.
Leasing on a node is also helping securing the network by bringing decentralization.
Binance validator node represent more than 8% of the network, giving them huge power over the network and giving them decision weight on the future.
By leasing to a node you're a giving the power back to everyone.
When staking on Binance, your coins are on Binance, a huge target of potential hacking. If they ever get hacked and their coins are stolen, you will lose yours. While it's probable Binance have an insurance and would use it to repay its user, it may not be able to cover your funds at 100%.
On the other hand, when you lease to a node, your coins are in your wallet, and never leaves it. You are in full control at any moment. Even if a node happened to be hacked, you will only be able to lose unclaimed rewards, severely limiting the risks. Also, a node will not hold a big amount of coins at any moment, making it a less desirable target of hackers.
A little summary on the pro and cons of staking on Binance: