Binance adds ADA and AVAX as collateral assets
In an article published on its blog on May 25, the famous crypto exchange Binance announces that it is adding ADA and AVAX cryptocurrencies as collateral assets on its Binance Loans platform. This means that these cryptos can be used as collateral when a user wishes to make a loan.
But the difference is that by contracting a loan with ADA or AVAX as a collateral asset, the latter will be able to be staked to reduce interest.
In other words, the collateral assets used to borrow are deposited in a specific portfolio to support the operation of the cryptocurrency blockchain network. In return for this immobilization, the user receives rewards which allow him to reduce the interest rates of his loan.
👉 More info: What is staking?
Binance Loans is developing very actively
Binance Loans is a service launched by the platform that allows to borrow certain cryptocurrencies such as Bitcoin (BTC), Ether (ETH) or Binance Coin (BNB) for a limited time, usually no more than 180 days, or 6 months. He you just need to have a Binance account to borrow.
Like a loan contract, users wishing to borrow must use guarantees which result in the immobilization of some of their cryptocurrencies. Binance added ADA and AVAX to diversify currencies used as collateral, and thus offer a more complete service.
It will be recalled that this Binance borrowing service must be distinguished from decentralized finance (DeFi). We are talking here rather about CeFi, the service based on a centralized platform. Users can gain security with this type of loan, but the conditions are generally more rigid.
👉 On the same subject: Bitpanda launches its staking service with 11 cryptocurrencies
Source: Binance Blog
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