Binance Launches High Margin Lending Business

Lending is a high-margin business for Binance
Binance lends coin to borrowers at ~15% annualized and borrows from customer lenders at ~7%
Crytpo and Bitcoin Market Cap Story of Day

Crytpo and Bitcoin Market Cap Story of Day

CRYPTO MOVERS AND PRICES

 

 

CRYPTO STORY OF THE DAY

Yesterday, Binance Announced They Would Be Launching A Lending Platform Offering Binance Coin (BNB), Tether (USDt) And, Surprisingly, Ethereum Classic (ETC) - The Announcement Follows A Mysterious Rally In ETC Last Week That Saw The Token Gain ~40% In An Otherwise Flat Crypto Market

The products will be launched at 2AM EST on August 28. In the, 'first phase of lending' the platform will be offering 14-day fixed loans of 15% for BNB, 10% for USDt and 7% for ETC. Loans will be awarded on a 'first come first serve basis' with BNB capped at 200,000 coins and USDt at 10M (no cap appears available for ETC).

Crypto Takeaway:

There are a couple of points that come to mind on this announcement. First, this is a high-margin business for Binance. In the case of ETC, for example, the platform lends coin to borrowers at ~15% annualized and borrows from customer lenders at ~7%. In the case of Tether, they are offering 10% annualized returns where lending rates on Bitfinex are closer to 13%. Secondly, it seems likely that last week's mystery ETC run-up was in some way related to the announcement. It's unclear whether the move was the result of a leak or due to some kind of operational necessity but it once again raises questions on: 1) the way Binance releases information (KYC hack) and 2) uses their power as one of the largest crypto/crypto trading centers (BSV delisting).

It has been made apparent to us that an ETC lending cap of 20,000 coins has been introduced by Binance. It is also worth pointing out that those are total subscription caps while individual caps are 500 BNB, 1M USDt and 1,000 ETC.

About the Author

FRNT Financial is an Institutional Brokerage which offers clients a variety of products along with research & analytics in the crypto-space.