The largest crypto exchange, Binance, published a cryptic message on its X (formerly Twitter) account on August 29. The post contained only five characters: “BNSOL”, sparking a flurry of speculations. The community began to wonder whether Binance is introducing a new product or if a significant partnership is on the horizon. This teaser was a smart move by Binance, engaging the community and piquing their curiosity about its next move.
Our Research about BNSOL
We conducted thorough research on BNSOL and uncovered some intriguing information that we are excited to share with our readers. Initially, we were not entirely confident in our findings, but it seemed we had identified the correct answer to the question, “What is BNSOL?” Today, Binance tweeted and confirmed that our research was accurate.
Binance’s Announcement
On September 11, 2024, Binance posted a tweet revealing the mystery behind BNSOL. The tweet stated, “In a very short time, liquid staking will get a new fren—BNSOL.” This announcement confirms that Binance is introducing a new form of liquid staking.
What is BNSOL?
BNSOL is a liquid staking token (LST) that can be utilized for trading, lending, or providing liquidity, all while still earning rewards for your SOL staking. If you are familiar with the staking feature on Binance, you know that staking your tokens typically locks them either for a specific period or in flexible staking. In both scenarios, you cannot use your assets for other purposes while they are locked. However, with some decentralized protocols, you receive liquidity tokens as proof of your staking.
Binance’s Innovation
Binance has introduced a unique staking method called Liquid Staking, providing users with more flexibility to use their SOL tokens even when staked. This allows them to generate revenue while maintaining the usability of their tokens.
How Does BNSOL Work?
The process is straightforward using Binance’s earn feature. When a user stakes their SOL on Binance, they will receive BNSOL tokens in their spot balance. The BNSOL:SOL conversion ratio on the Binance SOL staking page determines the number of BNSOL tokens received.
Understanding the Conversion
One BNSOL is equivalent to one staked SOL plus the accumulated staking rewards until the Solana epoch ends. Over time, the value of BNSOL will progressively exceed that of one SOL. With each new Solana epoch, Binance updates the conversion rate, typically every two days. Once you stake SOL, you receive BNSOL in your spot wallet, which you can transfer to the Binance Web3 wallet for use with other Binance products or external decentralized applications (dApps).
Redeeming BNSOL
You can redeem the liquid staking token for SOL based on the current BNSOL conversion ratio, similar to the staking process. However, it is noteworthy that the redemption process might take up to four days due to processing restrictions.
Looking Ahead!
With the introduction of BNSOL, Binance is revolutionizing the way users stake their SOL to receive interest. This new liquid staking feature allows users to generate revenue from their SOL staking while simultaneously using the tokens for other purposes. This advancement surpasses traditional staking on decentralized protocols.
Maximizing Utility
Now, users can enjoy the benefits of staking rewards while utilizing their staked tokens for lending or trading. BNSOL offers a sophisticated and flexible approach to staking, making it an exciting development for the cryptocurrency community.
