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 19.48%.
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||2022 Jul 04|
|Value Date||2022 Jul 05|
|Interest End Date||2022 Aug 04|
|Redemption Date||2022 Aug 08||100.82 LTO||101.78 LTO|
|Period 2||Stake Date||2022 Aug 08|
|Value Date||2022 Aug 09|
|Interest End Date||2022 Sep 08|
|Redemption Date||2022 Sep 12||101.65 LTO||103.60 LTO|
|Period 3||Stake Date||2022 Sep 12|
|Value Date||2022 Sep 13|
|Interest End Date||2022 Oct 13|
|Redemption Date||2022 Oct 17||102.49 LTO||105.45 LTO|
|Period 4||Stake Date||2022 Oct 17|
|Value Date||2022 Oct 18|
|Interest End Date||2022 Nov 17|
|Redemption Date||2022 Nov 21||103.33 LTO||107.33 LTO|
|Period 5||Stake Date||2022 Nov 21|
|Value Date||2022 Nov 22|
|Interest End Date||2022 Dec 22|
|Redemption Date||2022 Dec 26||104.18 LTO||109.24 LTO|
|Period 6||Stake Date||2022 Dec 26|
|Value Date||2022 Dec 27|
|Interest End Date||2023 Jan 26|
|Redemption Date||2023 Jan 30||105.03 LTO||111.19 LTO|
|Period 7||Stake Date||2023 Jan 30|
|Value Date||2023 Jan 31|
|Interest End Date||2023 Mar 02|
|Redemption Date||2023 Mar 06||105.90 LTO||113.18 LTO|
|Period 8||Stake Date||2023 Mar 06|
|Value Date||2023 Mar 07|
|Interest End Date||2023 Apr 06|
|Redemption Date||2023 Apr 10||106.77 LTO||115.19 LTO|
|Period 9||Stake Date||2023 Apr 10|
|Value Date||2023 Apr 11|
|Interest End Date||2023 May 11|
|Redemption Date||2023 May 15||107.65 LTO||117.25 LTO|
|Period 10||Stake Date||2023 May 15|
|Value Date||2023 May 16|
|Interest End Date||2023 Jun 15|
|Redemption Date||2023 Jun 19||108.53 LTO||119.34 LTO|
|Period 11||Stake Date||2023 Jun 19|
|Value Date||2023 Jun 20|
|Interest End Date||2023 Jul 20|
|Redemption Date||2023 Jul 24||109.42 LTO||121.47 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: